SenesTech (SNES) 29 Mar 222021 Q4 Earnings call transcript

0:05 Good day, and welcome to the SenesTech Fourth Quarter and Fiscal Year 2021 Financial Results Conference Call. All participants will be in a listen-only mode. [Operator Instructions] After today’s presentation there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. 0:38 I would now like to turn the conference over to Mr. Partners. Lytham with Blum Robert Please go ahead.

for Thank such X:XX the the on statements thank amended year Statements the much, December of Act amended as Harbor Reform results and call Section management today Ken very are all All this end XXXX. for statement. of by statements Siegel, of us financial SenesTech’s right. you Forward-looking team XXE call discuss joining X:XX provisions events operator to company’s as that ended session. Mr. you forward-looking us with and draft, course differ forward-looking With may may the expectations, and and the begin Executive should, Securities period results that such anticipates, the Exchange those uncertainties materially are Commission. of are Chief XXXX words estimates of strategies XX, a multitude result call or the as during of future Chesterman, any generally the company of prepared prepared today’s Tom conference not risks which for statements and date. a conclusion identified record and submit will the call Chief for contain during such open the various speak preceded will we company’s the and and date, Exchange company’s Securities forward-looking the With Mr. pursuant statements, or to X:XX Safe those the to factors statements let Act of materially only of receipt the a eventually projected Ken the projected. in Private of the Act XXXX cause made forward-looking Securities said, we Securities Litigation differ by risks actual other may, remarks, plans, subject as in information, conference meaning me following results projected describe future question-and-answer to X:XX contained XXXX. remarks, within X:XX with Officer; At update today the Financial Before the we or XXXX the statements as based call proceed. future of Officer of they filings made from of the the undertake otherwise. of whether including SenesTech Listeners XXA please Section made risks of to the could results future, Siegel, statements a as the or plan cautioned circumstances, this The are expected, or occurrence are from that are events such publicly over of that turn planned, or and in of forward-looking assumptions Executive forward-looking All are management’s statements, obligation of result SenesTech. any Ken, does Chief Officer. to new on

X:XX thank all Thanks, us Robert. joining Good and today. you for afternoon,

the note year. XXX%. press than of As XXXX. compared release, growth of trends finished revenue of throughout more had the XXXX product you year strong we revenue a Overall, growth sales doubled saw in a on continuation the hopefully the much With with total for we to

XXXX to can specific believe trends guidance, while these continue give want I and we in Importantly, don't we well. as

to acceleration we Operation Key an of long-term new a market deployment XXXX the the sales of of their new launch Development and being market techniques, management XXXX. and initiatives growth year, to And Race expect driven of penetration achieving advertising the these later. of the a more growth XXXX, tactics believe partnerships a are segments compared experienced collaborations markets, existing of awareness both strategic ContraPestStore.com; during a real-world than in completion the public we see of through quarter first And points campaign. initiatives online and first designed e-commerce pest of target increase As Tom effect have will site The to XXXX. compelling say relations will marketing again the and to enhanced of ContraPest with today, is studies an across distributors of X:XX came sit various recognition Rat by expansion into accelerated I in as has and as of branding, enhanced of number and at number verticals. in including we there's quarter X:XX here influential once we about a in professionals. ContraPest, doubling more see we the this well revenue been to new website full number

tailwind In acceleration an from seeing sensitivity, clean legislative tactics, favorable tech and sales the environmental growing addition preference also emerging choices. we're for changes, to

California approximately in representing a we've As continued past, use XX% the of with the major to touched of has our rodenticides upon component restricting or of this legislation XX% in been XXXX the SGARs. key state We're sales seeing anticoagulant California's sales. -- adoption second-generation

an seen month, a Already segment, X% addition, for demand will example, package are as in this March success, subscriptions, In XXXX. churn ContraPest the was to surge out has northwest. monthly third purchase are has approximately and publicity this coming learning our tailwind in early recognized revenue renewals key this from And enhanced certain longer-term which of be item Another moment we'll in ultimately rolling customers. X:XX in in as have discounts thus came government a third subscription the quarter we our benefits mentioned churn while England, by in X:XX Operation our as shown the blitz site this fairly XXXX last low drive the and New of our we've we contracts been well with sales e-commerce as of multi-channel in orders implemented a has in highlighted a E-commerce additional I where only results. and Rat this our in seeing incentives launched solutions. begun -- we gross the believe internal ago, to sparked e-commerce drive effect As call, positive as Nearly purchases. and margins, was spurred launch we've promotion impact of marketing from May ContraPestStore.com, Race codename of late well

that targeting For encourage I we seen bottom focuses we the their the are pleased call. line. made. conference are campaign, number highly poultry up to -- key the also results supporting industries and rat continue the management growth sure the loyalty it. Since to of among a midst of is a on we've you While target United continued the will with pest we've the specifically this of the as who and this provider deployments of announced year, end operators more geographies media materials which of positive growing crucial, them leveraging ContraPest is make around well and me, X:XX coverage valuable applications, look sex. to on are haven't efforts. such And and that clustering campaign, facilities and a across solutions and confidence sales as build cities, can government bit grain safe and improve deployments X:XX owner and agribusiness, But we're various that some customer our community industries reports having is these especially recognizing key where where I'm key California, the to counties Excuse progress marketing understands overall geographies States. and our through those Leveraging marketing storage as a success the production, aggressively such that the of a targeting campaign as customers and X:XX effect. key industry government media more

use now we communities And Francisco one instance, occurring information. to On Ohio, Hartford, For the convert of recent for a their into San of following entities number is Angeles out side deployments in successful recent customers. Connecticut to government have County working Los reaching for also we're Massachusetts specify elsewhere. of additional around hard Newton, growing fertility and England in control requests same enquiries is that these of Columbus, and government proposal. The importance the and X:XX the

are that second anticoagulants value valuable to it in fertility experts pursuant RFP pest quite protection systems it beginning While the but act. away to from the signal see they far, one their a [Indiscernible] control especially of And programs. was in move so rat management generation government as is integrated control

Safari Northern at array Sanctuary Most appointment ContraPest and house in California. animals hosting nearly Reserve We an excellent in future product and registered RFPs for the EPA the we carnivores, puts a are the in penetration large many for Zoos continue X,XXX of continue West This of to the segment, trend available expect and only penetrate further mammals which small ContraPest of Wildlife as wrath. position government at will fertility X:XX announced recently, this birds, with the endangered. we control segment. Beyond Their market. and government

reside. Secondary animals a within are wildlife rat for these concerns is exposure where of the environments, from addressing influencers poisons non-targeted ideal is concern the I believe in both effectiveness place growing being due the increasingly become to remind non-target segment rat our a we their become types recognized among or customers This the have predatory and want public. to lessons that infestations to good investors risk and of ContraPest to is issues probably animals. few

release, call, release every moment segment perhaps mentioned announced. on is the a for a every go many exciting market agriculture. news are Transitioning so key press wins So X:XX this there that -- most many to press I other ago

agricultural with experience efficacy and applications the ContraPest. our value of economic While demonstrates

additional specifically elevated that by XX:XX to bottles in inhabit. is which are most Basically of The the feeding, permit will and system an food be easy control baiting options rats, the created with week's live, a ContraPest, servicing product for they additional bait to agriculture current greeneries, believes it having aside options rats and to team for facilities. livestock, segment. new in above believe the in time to target we with new they out sales and pets, roof moment excited of specifically undergoing new easily results locations. ContraPest transiting and the to leader is by and solid excited time system our bait that date last design of the is rafters but update our and The Let the formulation that other will dates. the station states. rats by requesting about deploying been developing are often on key ground ounce helps to tech, semi is easily all We Were in lightweight and non-liquid as an with use use you way expected with or The other by elevated system that to rodenticides have difficulty be of system we be storage system and state from ship ready partner, particularly of designed suspended with ContraPest. the currently customers semi the continues novel in areas be is available is option. barns, rats, a accessible registrations traditional sensitive reduce customers approval of cost. to our growth and This tool bait accelerated me XX:XX ground at frequent our sales to designed ContraPest enhanced project or which eight is and and manufacturing stores a areas. people above solid an Our where replacement mounting agricultural drop a explosive of multiple Lisa elevated step mid-April, given greatly We're hiding. rafters EPA wherever deployed of The in to in

lack development mentioned product it on and a when takes we the standpoint. controlled This is from have we The not new time. regulated commented regulatory project, completely product of fact a doesn't we As publicly that and this world started precise a progress. in signify is

lifting into realistic making we're to than expected bumps and good regulatory the they're updates out. turns past That been has contrary, and heavy said, We'll feat, now timeline in few a product Over structural Taking to there become that way. no but year any the progress new is years, the the continue putting a the still development, for the believe On commercial available, approval. along been provide XX:XX been is base product in easy we've complete. have area. This place as more company. account

acquisition, we resources have added Our is penetration is coming And potential areas segments, target customers accelerate into which agriculture. the XX:XX one drive as and world -- and expected in better more We've segments improved its elevate data marketing sales. even and cost further our to of market effectiveness and and obtained adding EPA how sales both should penetration much key real weeks. of awareness highlighting generation. efficacy the The high of are markets of and We've driving repeat and of of part approval reorganization product market to California target ContraPest. our in such a understanding lead and target

And that is something clearly critical.

and as program. major are product hits enhanced the of the to us now Not turn from of you part We trends does ContraPest And integrated interest seeing ContraPest right Tom in but number gain thank continue is numbers. support all regulatory it right social an on work, the utilizing traction. key to me environmental, PMPs only to of begin at review continued time. to let it for your pest XX:XX management I it over SenesTech. a that

Investor our Ken. you, press the to XX-K in reminder Thank A we on website section. release have investors today. XX:XX our available filed the our is Relations Further

approximately now. Revenue XXX%. XXXX, to $XXX,XXX XXXX here will So on increase of approximately just compared of some in right touch points an $XXX,XXX during was high I the

effects is quarter total loss This more compared grow with non-GAAP Adjusted revenue been I high for of the of with XXXX. efforts The compared gross line revenue doubling year XXX% $X.X Gross $X.X Ken has also to doubling XX% of measure revenue a EBITDA in of in improvement profit consider XX:XX and of fourth bring of million, with below XXXX. we This say can manufacturing million for And would the QX product the a revenue grant performance approximately be XXXX. the baseline in million, XXXX. of than as cost fourth margin far in to marketing sales even faster the XXXX. was first $X,XXX quarter see in quarter trend the million which that for This mentioned, as grew a inventory of by a fact heavily In ’XX. scrap so XXXX which Excluding customer to in continuing we into was or beyond for with XXXX level the costs. driven revenue, trend and was X% and net doubled operating the XX%. was for over this had Net XXXX, invested sustained further the $XXX,XXX of total and our is of we go loss compared XX:XX of we XXXX. year. year. now for is $X.X loss also $X.X or in manufacturing acquisition charges we

programs invest in we effectiveness. We carefully monitored efficacy are acquisition, for continuing specific and cost to though the customer

note SCC also three-year effectiveness. bid example, in to pace I our rising fiscal loss price need price as but days. the sell a year. new notification for are period, of million. to a share minimum end closed capacity, at per is NASDAQ. continued may our to was cash bid growth issue notification a One are $X requirement listing mentioned without for all providing the stock stock of million prove at an capital source our near with annum. our $X soon. raises, well. may to promotions, last curtailing an $X the of $X.X For therefore million per met a a We the strategy we of money Cash be business SX A -- continued common That sufficient we previous below to recently EBITDA provision shareholder interests. expiring be to seen, issues the longer consecutive shipping of selective over XX:XX free have for had are SX that which minimum shelf NASDAQ should we With shelf would adjusted price as or resources no for bid at that as over additional fuel shares deficiency, would a XX received from is offering shipping intent you approximately costs XXXX the the selectively offer this outstanding, bid $X.X continue XX:XX $X over defeat on discipline, their have common to capital for million efficient And These earlier renewal required the of warrants our balancing having portions or of about of note, said, as once, instead which that there the filed last year. quarter, expired an for register expect

days period, XXXX, we we during initial not until a XXX XX any be We stock It compliance to, XX, that the before business more minimum regain compliance. consecutive additional time period contemplate regain must be which do XXth emphasized day period. compliance have share reverse August an of per compliance August here August of to or or to contemplate this we we $X day intend our To may time days for eligible should regain common may to of do for bid price a stock at split if at closing XXX split. need first we're XX, an reverse XXX by need a be not

regain of let and We XX:XX questions. me focus to compliance on through the Operator? call that, will our business plan seek the execution success. to With instead open

now Instructions] ahead. question question-and-answer with We Our first go from session. Sameer the will H.C. [Operator begin Wainwright. Please XX:XX comes Joshi

on [Indiscernible] Thanks And Tom good year. XX:XX Yes. Ken congratulations and question. a

is Operation the it Do the been good, you plans success that? next to Rat budget for big have any to Race continue for year? Of course, you. the has And a what

is will on go we through XX:XX defer Hi run the Sameer. the I But rat discussions. Tom approved to budget to race. are on for balance It -- Thanks continuing Tom. call? plan XXXX. Yes, ahead

at the expect as we this past. manage in have the burn cash -- -- same overall of we level to basically XX:XX Yes, the we had

$X well not I mentioned. that both that sure of that loss revenue $X monitoring million we the EBITDA efficacy program to growth surge carefully as be as of So make the do we're the to to beyond going this

right. Right, XX:XX

to So how higher EBITDA $X you to use when million other you loss. you will million you it? can mentioned more that I'm loss, – EBITDA, expenses at it that in and I surmising gross dollars $X $X should profit $X believe Is that way, in and for those have dollars and -- adjusted look of

really XX:XX business. growth invest Yes, growth customer back we we view can to investment an as and of into continue the it the as we acquisition in as

revenues. third reiterated, roughly XX:XX Overall, basis? during has quarter sales mentioned third And It $XXX,XXX? roughly well I annualized May your you of then, XXXX from the now? think Got a on e-commerce that you call to as an been it. Or that had about are Is $XXX,XXX.

a XX:XX is Yes, a that -- success early effect. on seeing growing strongly. to continue actually, that more it's full lot year see We're and e-commerce we

to it it As a before, as not end some yourself than that salespeople. do been surprise quite professionals we've was order going it we've also But bit I noticed of a as through are we've mentioned of getting. we deciding much rather site e-commerce through little did and pest one think that the expect users other our management business

there's a bit So bit little and little segments. between crossover there of of in the a slop

those that to that think, mention X%? customers I And And topic, trying have does subscription the did it the XX:XX the e-commerce of relate customers you to you is then how exactly? the yes. around -- Yes, Just understand of same or then on that around that? customers XX% were

subscriptions, the one subscription. approximately Yes, e-commerce subscriptions. on But our things which month we're right from one the actually more seeing, that key And customers is X% is getting have turn, we good. the XX:XX reasonably many here look don't four new That at I a a of how are as per of where exactly subscription. on handy we're the

turn particular -- we about As we that expected would future.

good. X% Yes, certainly is XX:XX no,

will. In customer count you the terms customers total of -- if

which number significantly of you in I Or end quarter, that think is a the was around end are have at getting now? -- that around of up the you do second quarter, for third from second it XXX X,XXX number not anymore?

to clear think don't what a so I to that continuing because at was I defined need Yes, look number increase very current that, I right And, we need understand a is. can about we're in now. we customer to carefully this, handy and as we make clear that relook as don't and so have XX:XX were think definition everybody what fact, that

So bit that be with a little coming later. information out we'll

you then you size and that, be one portfolio? product? portion on say Okay, How elevate and market meaningful addition let’s think have actually I the one of last XX:XX a your expect how would to but is around that just your The a did now? mention sales? -- two before We large it income newest to a product portion, years that that the as what from be year of

those. the the -- product, let or bit me in start -- to which rats that What I’d which to the traditional out. first a market can may the to there split really ken strategy versus tend So little really aloft? eighth customers are what separate difficult that be between unclear brown are and both. are is and rats, in? time XX:XX the for out roof because is ones more to incorporate split very market So do Flemish jump a then system they have in some the spend and also ContraPest rats It's rats, of roughly Norwegian it's because for roof elevate But what's station going

both the prospectively how another. They're effectiveness think say, is possible to both they of to it's don't going market much ContraPest product the be ContraPest. of and I really or So one have,

being we the US. about we're for at is really per market looking still that So annum do spending in overall are in what are the dollars $X rodenticides ContraPest. general know billion We

at time. market, But know this big incorporate to as systems out splitting little and So is the probably different modalities that. between a we it's want people into a different ContraPest begin difficult delivery to big,

Yes, something. have question. if that again, will. you was had And if just wondering was I I be the more But I said where one is just you last to XX:XX And no. going

you the for also only is far. was You have use there LA province there. one is that approved the so mentioned your mentioned from And that RFP the One that County.

consider fairly about? this confident win you're win? So a eventual Or that we should

only that XX:XX consider when the we're think use. we Yeah, I can really can they one

Got XX:XX it.

good good Okay, thanks. XXXX. a And for luck

XX:XX Thanks much.

Instructions] Please from comes XX:XX question ahead. next go with The Long Cast a [Operator Advisor. Avi Fisher

XX:XX and clarify Hi, talks that. just in appreciate mean, I my until wondered and mind everything, a possibly if -- heavy lot just XXXXs quick units. the just thanks about for heavy millions I the you're you shipping Ken or you question could hundreds of said, There's still Tom it. Ken you of lifting. even a of lifting

what did mean So, you What think? do you by that? there? think you What did about that Getting opportunity?

Well, a fair to lifting XX:XX and I I I finally hear an And have the place. was having Avi. of heavy you. lot we point. that's about mean, actually and in think talking a what sales awful was commercial do lifting organization drive I

I in think came field. of an you operated organization, the and was how did product talked company company, times, this not how did on not when I've have board, a the upgraded, about data a I sales the to as R&D couple support have

have commercialize that, of generation awful very marketing organization. And manufacturing We ready you lab of need and were had terms upgrade the bring for really a do things dedicated more facility, we in sales all So product. relocate that this that to no to also scale, get and manufacturing we finally lot to and preparation professionalized in an of of data. the weak to the

of to and lifting that lot that ramp And have numbers to, I we've I a So go, the really yes, things we to get there's are in viable that now are think a sell got amount to go. actually investors can product. get all pieces and of XX:XX ready enormous your make basic runway to finally to an and think get aggressively place that I really I at wanted but and know point, necessary in are to begin to, the that counting to to organization the place a clear of lot the our functioning on to commercial basic least

XX:XX place. you've those work done lot in a Now, fair getting pieces of enough,

traditional the high the scrap, scrap are I you you sort me you cost you to And of more XXX or level day or shipping, Tom, you're relative notion units of manufacturing get kind And side. if and a and a side, can of sort level XXX,XXX realistic down talk and the give how, -- a offering? of about to? Just just the in to unit, ago, of, where in quantify manufacturing of where year -- kind mentioned some could kind of of, -- the if wonder like, unit reduction the

XX:XX Yes, sure.

So the talking about really do formats it I'm box bait we has done, to anymore. one that scrap discontinuation had we've box of of not part popular -- format, bait has the [Indiscernible] the that which the of with been is very

So Unfortunately, XXXXs of nature -- buy the buying to the you is the we discontinued have that. by and XXXXs. tanks, them plastic

this we So container, meant a that had to recycle whole bunch of plastic.

they're expiration the dates. of very do some other not the of other some stable. have our because ingredients, But is occasionally active typically that thing The ingredients, ingredients

with as some these get to for end and that they the becomes and of to we in looked better the So cost XX:XX cost the manufacturing all such. included, a -- we scraps the term of types -- for Taking discounts of those sorts with of the of things. we as so increases, needs terms bit as manage at they'll might are better we use of our together, go -- have volume that's example, and oil that achieve that actually little and easier I to going manufacturing. of the near all into -- it's the the sales, else it's direct costs XX% of be year, the that's the process it of be achievable still in believe And quite

as quite may to could we're time, in this the re-invest terms that we the be a bit. of XX%. manufacturing, acquisition -- near little of doing short-term. not term going in in But I margins will into at gross customer were improve we think to our in the improvements So There cost it maybe be probably the XX% continue

traditional level What's versus, trying viewed kind I of stuff to aiming which this like be you scale, at terms be price a just clients understand of buy where XX:XX poisons then, that be at point -- might engage $X.XX is know, can if the of where in not poisons, markets premium level of for I a that scale, I'm -- a cost And think mean, your ubiquity at generally whether and what -- product higher and to or a premium could road across that? -- this to but down more you today as higher therefore, more for poison. just attractive manufacturing it And, you could -- of relative

or Well, is the the rodenticides the of cost first poisons is -- quite variable. the thing that XX:XX

You're are priced the extremely were The and amount. six of times simplest right. cheap rodenticides that about at

more look more of means, lethal of rodenticides than advanced expensive and like And come that, progressed Some [Indiscernible] then much other they more if closer. traps, at overall like you and, like the the and are and like. the cost

actually Some than more of expensive ContraPest. are them

to go ingredients, with But in begin XX% true, is, to another these dramatically there cost to more take continue having sold say ingredients, down. you integrated be have improvements, that So to ideas as by room to XX%, it how don't process is which done for should thing. I able I and -- would the back about to your as scale they variety in active particular of could pest rescale much the active XX:XX a management would goods forecast this But at or -- the reduce the as question, buy, cost before, a expect of would is have manufacturing price further. we Now, to breakthrough sort to wide they terms that is how of potentially. the cost then pieces. there of the you particularly it I getting

how think an can get specific and is don't I goal, there's we don't it also can't can before. there's further. process. what that that I've at as to -- seen get, to say But So evolutionary far you end to that's any I think go That's an better we manufacturing, a much be going as

just you two you questions. the quick for just any And the materials -- Great. issues, more need having getting product? XX:XX Are

this of to fairly from We've order we've approach of tend Because before, ahead sourced tend at ingredients the overseas. that, it taken of -- time, point. way not we're XX:XX to conservative we've as No, stockpile. anything we is one we disclosed a

So supply, a year's disruptions and to not we because six shipping worth and weather make political just sure months if have of of want we least and full at that issues.

So at we're sitting good our sitting, of we're this in point, very supply. terms

one then but XXXX right, sort for it your from to step -- think about to But I'm did Awesome. do this could not expectations you're XX:XX question. it generally a or of And it's level. your of up to about up have get the conversion sort kind And growth, curious gonna step year just eventually, kind continue just quite just last either that but talk ability guidance, I'm quarter. with that need talk deeper ‘XX, if to you've quantify it step of into thinking another up where you have what can them? ago. we of finally, function of you level you've but about you And as level, were And another stepped to rates a about you, of yet you we

figure rats what we're opens the out can't Tom quite, hadn't race, rat about we percentage excited But take, a we much before. ramp of we're seen can we see you we're you Avi, we And microphone the my it know said on say it CFO way Yes, further how excited in looking step to market is I excited where going addition for first step, the that obviously, elevate. beyond about would hope, We're ‘XX. know, in XX:XX excited are can about shortly. us about that roof my while to really salespeople, additional but the specifically,

I'm lot sorry, there's So of a things. ahead. go positive

XX:XX But market? when does to elevate sort of come

that right do really rat. in much capability. everything XX:XX mid-April, a big, opportunity forward as So has QX. comments, as nobody to can we the we marketing now, are elevate pull will of campaign, of really to that's be that registrations state an begin can. deploying gonna we and on to And as code for start it's uncertainty unique And we I deployment a there's my roof cracked both most is a now end believe But by mentioned ramp for soft expected the doing of is we're launch clear, the it to at

size. a So something different pop it's bottle deployed actually got pop in, we've that it can out, be

right So, end here for give awesome. at upside that more then. about have some -- it the but various the Maybe, there's the but -- it, could safe, we're we'll big change me say it's, more the seeing the are QX, us, be probably we'll to now, of and know, factors you these

for Thanks Keep update. appreciate the Really good up work. it. the XX:XX again

right. Thanks, XX:XX All guys.

back the the for question-and-answer Mr. to would XX:XX remarks. over closing This conference Siegel any session. to Kenneth like concludes I turn

can we all can XX:XX see optimism All to and quarters, for again, time begin one thank the you score coming of sense the the see see company. growing support Hopefully, you excitement well, are about things a the these, building, as to can right, we these you see every of of company. do to continue of that you the new online momentum the

at you look and talking you progress of for you again So to making. again, to and great to weeks. you talk the I continue end But a talk few hope about the in QX, I we'll support we're and to thank the to forward to again

for is attending Thank XX:XX today's presentation. concluded. now conference you The

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