Q2 2020 Fulgent Genetics Inc Earnings Call
[music].
Ladies and gentlemen, Thank me standby and welcome to the Q2 2020 Fortune Genetics earnings Conference call. At this time, all participants are missing element. It means we will conduct a question answer session and instructions will follow at that's fine if anyone should be quite it's just it's getting to conference. Please.
Press Star then yeah, that's when you take chemicals.
As a reminder, just Comping school is being recorded I'd now like scent called make you host Mr. cool warship Investor Relations. Please go ahead.
Great. Thanks, Good afternoon, and welcome to the Fulgent Genetics second quarter 2020 financial results conference call on the call. Today is named Shea Chief Executive Officer, Paul can Chief Financial Officer, and Brendan Pirquitas, Chief Commercial officer, the Companys [laughter] press release discussing its financial results is available in the Investor Relations section of the company's website.
Paul Genetics Dot Com, an audio replay of this call will be available. Shortly after the call include please visit the Investor Relations section of the company's website, an audio replay.
[laughter] prepared remark in answer to your question on today's call will contain forward looking statements. These forward looking statements represent managements estimates based on current views and assumptions, which may prove to be incorrect.
As a result matters discussed in any forward looking statements are subject to risks uncertainties and changes in circumstances that may cause actual results to differ from those described in the forward looking statement. The company assumes no obligation to update any of the forward looking statement. It may make today to reflect actual results or change than expectation.
And there should not rely on any forward looking statements as predictions of future events and should listens management's remarks today with the understanding that actual events, including the companys actual future results.
Amateur maybe materially different and what is described in or implied by these forward looking statements. Please review the more detailed discussions related to these forward looking statements, including the discussion, but some of the risk factors that may cause results to differ from those describing these forward looking statements contained in the company's filings with the Securities and Exchange Commission, including the previous.
We filed 10-Q three quarter ended March 31st 2020, which is available on the company's Investor Relations website management's prepared remarks, including discussions of earnings and earnings per share contain financial measures not prepared in accordance with accounting principles generally accepted in the United States or gap management has presented these non-GAAP financial measures because it.
Leaves they may be useful to investors for various reasons, but they should not be viewed as a substitute or superior to the companys financial results compared prepared in accordance with GAAP.
We see the company's press released discussing its financial results for the second quarter of 2020 or more information, including the description of how the company calculate non-GAAP earnings and earnings per share and a reconciliation of these financial measures to income an income per share. The most directly comparable GAAP financial measures with that I'd now like turn the call over to me.
Thank you Nicole good afternoon, and thank you for joining our call today to discuss our second quarter 2020 result.
I will review the highlights from our second quarter before and do we need to work to our chief commercial officer.
In bookings to point to appease on our world.
Commercial success and the go to market square footage.
And finally, Paul will discuss our financial results in the also in Peafiel.
Before I comment on our marketing strategy and the business.
I first want to stop I see our hearts goes to those who have been impacted by the whole Nike.
We are India's together and the we are doing as much as a weekend to address this pandemic by opening our service which are critical for detection.
And the focal point of care in April escalation in the program to further spread.
And the price contact and trying to see information, we enable third he's put in play the car into the policy.
So I unforeseen events over this year.
But the need for testing capacity into the copper public sport sports like more than ever.
Oh.
The urgency Oh this pandemic has a push the limits of testing capacity across our industry.
Specifically over the issue I've been trying to get to read search empty weapon, you, even with the testing capabilities and to compress the timeline.
Well navigating the FTC approval process in the Scooting production on a Saturday the time table with a new public the health and the social gifting Menzies in mind.
For many many companies are caused our industry I've gone through this process to serve the grief that need for the public health solutions by both governmental and commercial customers.
There's a same endless events have also fully pool with.
Cool Fortune is that's a company.
We are a technology company, we used to the part B technology type them feel for massive scale.
Those core happy falling off.
The years.
Let's say.
Oh, sorry, the our technology platform is that the friendship.
<unk> our so.
Other companies in the industry.
And then this is no being show you our financial and operations.
No result.
With a stroke timeframe and the minimum investment [noise].
We're able to organically do well and the lunch Mark is vote test.
For coal Nike.
Received reputation by the F.D.A. own Mopey focus and them we major accounts.
Oh, which has caused the major inflection point in our business and our outlook.
Our second quarter report Pes, a warranty increased approximately 1300%.
Thirteentwo, both both from our first quarter.
And that we anticipate continued to accelerate the growth for the second half of the year, which Paul will go.
Oh, working deep hill from a requirement.
Oh were last call.
We come in the dot our traditional genetic testing business might be down approximately 25% to 30% in Q2.
However, given the incremental business, we saw from signing additional strategic customers in the quarter and they're right right at a rebound from existing customers during the month June.
Well you Alderson from our core business in Q2 was a flip worth of what do we saw in Q1.
Even with the uncertain regarding locked down throughout the where is the steep.
Our traditional businesses continue to gain momentum in July and the we anticipate healthy growth in the second quarter 2020.
Our cold Nike business.
The surplus our most optimistic expectations.
With a large enough we're really unique for testing.
Our quality.
80 to meet and exceed customer expectations is enabling us to feed the central park over the pool and that you should the by large organizations, we saw Cogs best opportunities with this.
Customer beyond coal Nike.
In ways that we're lucky awful market.
They used to work technology and the service quite apart.
I want to spend a few minutes to address a unique so our technology pipeline, which used to based on the technology from the high throughput computing sulfur industry. The pool. So for our team has extensive experience in developing even though we've.
Okay.
Processing power and the database management.
There's a highly complex augers other core of our technology. The key engineering team is a further whereas the in the field oval artificial intelligence utilize that even though with its high for pipeline and the massive computing architecture apply see the flow technology you.
Well, hi speed, the computing, which he easily scalable the teams also well schools in the information fusion technology, we secured it was a theater mining and fusion.
Fusion technology include a system integration tools and techniques, who ended with information from a large and Thats where did the systems.
Fusion technology, using deep learning Peckham knowledge in the ones that work flow and architecture. So do you ever customer will flow and assuming that the incretion.
Okay.
Customer to IP environment.
Our people now that you sell for engineering.
Fusion devices.
Technology pipe from for healthcare industry.
Recent the unforeseen events overcoat 19 and overwhelming demand.
For our service prices stress test the strength of our technology platform and the way our when we were pleased with that results.
We have readily that the low and the launch of the pest one major customer who seemed bennett with our platform improve let the Greek automation security reliability quality and efficiency.
Have scale up our operation while approximate.
<unk> thousand type approach per quarter 280000 in Q2 and on track to reach over a 700000.
Each coming quarters.
Our technology is now the cornerstone.
Hello facet of our physicians equal Cog compete pipeline service Records management Web portal service.
Clinical work Bro sequencing as series and ultimately that laboratory information management system.
In addition to our superior technology, we have a repeat that enable us to set set in this challenging worms, we have a technology team who have weeks prior experience in developing and the servicing numerous contracts.
Exceeded $100 million each in previous time, hopefully global crisis doing the attacks opened 911 in 2001.
We also have a management team.
Our experience to our fleet tours in the have skill with a business prior to Fourg.
Our headcount has grown from.
Almost 150.
People at the beginning of the 2022 or 300 people to date, we have being able to digest the hybrid demand for our service.
By Li <unk> Fung senior business, the all pretty person, who successfully orchestra surplus change supply chain management.
All predicts logistics quality control data security and the intensive customer expectations in the timing of crisis and historically.
As evidenced by our volume.
We made the materials strike.
We're operation capabilities, including capacity, we also Brendan.
Broadens our work go to market strategy with a lunch or co Nike at home test.
In addition, we received a marketable.
Yes.
Ft. During the quarter have a multiple you a's pending in the more you a application will be folk in the new future.
Moreover, we are making.
Great traction in the reimbursement market, which.
Should also help fuel our traditional genetic ngs business.
I will now over to co two Brendan.
I will cover this areas.
In further detail when it.
Thanks me this quarter more than ever we have demonstrated the power of the folder technology platform and we played a meaningful role in the fight against cover 90 Pandemics. At this time, we've received to Asia. The FDA wants a RT PCR test, which is administered by providers and a second for our at home Koby 90 test.
Got your by Thursday, which we launched in June.
Additional enjoy spending will issue updates as it becomes available at this time for that has an impressive array of Cowen I'd say customers with some of the largest municipality in the United States to Fortune 100 company large specialty care companies, but thousands of locations large hospital systems with hundreds of locations assisted living facility.
Across the United States and many more.
In addition, we recently just one a competitive RFP to provide testing for student athletes for a major incidentally conference.
Clients are choosing told it because we have eway approval, our turnaround time has consistently among the top in our industry with a median time for you in delivery of report within 24 hours receipt of the sample the availability of our customers Koby 90 portal for both ordering and reporting and our rapid ability to interface.
Yes, so seven.
Hi, or other methods.
As an example, the ladder, we were able to interface with large municipalities in less than three days.
We now have numerous client spending thousands of cobot 19 samples per day and still have a bandwidth to serve small clinics. In addition to be large organizations.
Operationally, it's been an impressive overhaul we're now running 24 hours a day seven days a week as Lee mentioned, we've doubled our company head count in the last three months to over 300, we've scaled coping 19 capacity from a couple of thousand deaths per day, the 10000 per day and now 30000 per day [laughter].
It does continue to scale to meet the existing and future demand for testing to support this capacity, we have secured guaranteed contracts with key suppliers.
While managing such a dynamic supply chain is that challenge.
Had zero supply chain constraints as a result at our contract and strong relationship with our vendors.
We have accomplished this while still maintaining and delivering one of the largest genetic testing menu was in the industry now over 18000 test strong.
A challenging area that are high volume customers have identified have been managing our logistics in the reporting.
This is the case for dry through testing sites as well as large corporations, who wants to do routine testing other employees.
To help our clients into allows it to be more integrated part of the process. We have rolled out three into in web based solutions. The first solution. It's bullshit community Cobot 19 platform. This is a complete solution for managing drive thru and walk up testing sites from the patient visiting our west.
Right.
Picking a location scheduling an appointment.
Pleading took questionnaire et cetera.
This new solution allows the administrator of the site to set the number of lanes. The number of available time slots and manage the collection process on the backend we're reporting solution that delivered reports directly to patient mobile phones.
This also includes heat maps and contact tracing functionality to date, San Bernardino County, Los Angeles County, the city of Long Beach, Santa Clara County, and Orange County are all using this new platform to run their drive thru and walk up testing sites.
The second solution is the pulls it enterprise Koby 19 screening platform. This is the into his solutions for companies who wants to do routine repeat testing we have built a solution. We're full it provides locations with our new platform a barcode scanner pre barcode achieved in collection materials and employee can simply.
We have protested station.
And our employee that or other identifier self administer a simple nasal swab and tropical collection box to be centerfold event.
Hi, Mobile version of this solution is also available which allows the same operation to be completed using mobile device your online or offline.
24 hours later, the reports are electronically delivered to the employees.
The third solution. It's pitcher Koby 19 for partners. This solution is based on the FDA easy way home collection Koby 19 test.
Organizations can order picture Koby 19 to embark and they can manage the bulk order and results via the picture Koby 19 partner portal.
This solution is particularly salute suited for schools, where students need to be tested before returning to campus. We believe these solutions are a powerful examples of our technology platform and our ability to rapidly develop new solutions and products. We look forward to using these platforms to drive deep relationships with our cloud.
Yes.
The demand Workover 19 services is strong and the pipeline for additional customers it's quite remarkable.
In addition to our critical covert 19 clients, we are seeing traction for our picture at home Koby 19, Ted.
Patients are appreciating the convenience of an at hotel and it's a great resource to conserve valuable physician time ETP.
We initially launched this service at $119 cash right. However, we've recently started to accept insurance are only charting $39 out of pocket, which cover the cost of the kit in the bi directional shipping.
This new insurance component includes an upfront automated verification of benefits and its integrated with our revenue cycle management system for simplified filing an insurance claims. This is yet. Another example of how the integrated folder technology platform driving efficiencies across our entire organization.
We believe this reduced price and the convenience factor will drive continued adoption.
In addition to covert 19 testing, we continue to offer multiple tests through our pitcher platform, including pitcher newborn and expanded newborn screening product pitcher parenting a carrier test for those looking to start or add to their family and tissue walnuts attest for those who want to learn more about their jeans linked the medically actionable conditions.
We see picture at the platform to make genetic testing easier and faster to access and we believe it will be a powerful delivery model in the future.
Over the last few months much has changed regarding our go to market strategy, but it could have been incremental to the business and focus we have had over the last year.
During Q2, we added significant number of new accounts are rare disease reproductive health hereditary cancer in cardiovascular genetics. These new opportunities are result of our increased commercial strength rapidly expanding test menu it competitive pricing and turnaround times as Mary mentioned, either with the unprecedented disruption in our country.
He has faced our core business orders were essentially flat with Q1 as a result at a rebound in orders in June and the addition of several new accounts.
Increased customer base and opportunities, we expect a return to growth in a traditional genetic testing business at the country continues to slowly reopened.
The other area of our business that continues to gain momentum in our sequencing at the service.
This also seen a bit from Koby 19 next generation sequencing Ted as many organizations look, particularly the genome Sars Cove too.
We also see material positive developments on the reimbursement coverage will commercial payers and this is being driven by the validation of our test quality of offerings push recovery by our customers tremendous volume trajectory in our business and capabilities.
Over the coming months, we will remain laser focused on delivering quality covert 19 testing expanding our koby 19 capabilities and maintaining a 24 hour turnaround time, while continuing to expand our non koby 19 business with the advent of new clients expanded test usage from that exists.
The genetic testing clients leveraging our expanded go to market strategy, including at home testing in additional coverage for commercial insurance payers.
I'll now turn the call over to fall to provide the detailed our financial performance.
Quarter as well provide data on our outlook call.
Thanks Brandon.
Second quarter revenue totaled 17.3 million, an increase of 105% compared to the second quarter of 2008 pool.
Our newest business remains the most significant driver of our momentum.
Revenues from the U.S. grew 141% year over year in the second quarter, representing 93% total revenues in the quarter.
Billable tests in the quarter totaled 180500.
Growing with 1003% over Q2 of last year.
Vast majority of the volume was our business related to cover thanks.
Hi, ASP in the quarter was $96 decreasing 84% from the first quarter cost per task for the quarter was $43 on a GAAP.
And $41 equitable equity based compensation of 270000.
Our gross margin improved eight points.
Sequentially and non-GAAP gross margin improved six percentage points sequentially. The primary reasons for the decrease and cost per tests were due to the heavy mix that's covered 19 volume.
However, even with the heavy investment in our operations, including equipment personnel.
Our gross margins improved notably from the prior quarter two different utilization of our technology platform.
Now turning to operating expenses non-GAAP operating margin improved approximately 34 percentage points towards sequentially.
Two positive 21.5%.
We made aggressive investments across the board in all facets of our organization, including operation.
Ill.
Marketing NGL day, the power of our technology platform proved to be extreme leverage within our business model. We believe this leverage and stuff the beginning of what's in store for the remainder of the year.
Our total GAAP operating expenses were 6.9 million further second quarter up from 5.6 going into first quarter.
Non-GAAP operating expenses totaled 6.1 million up from 4.9 million in the last quarter.
In a single quarter.
We have already fully recovered the investments that we've made and recovered 19 test research development and offerings.
And.
Since the beginning of the here, we look forward cut a handsome returns on these investments going forward.
Adjusted EBITDA for the second quarter was 4.3 million compared to 1.5 million in the second quarter of 2000 and Lynn.
On a non-GAAP basis, and excluding equity based compensation expense income for the quarter was $4 million or 17 cents per share based on a 22.9 million weighted average diluted common shares outstanding.
Turning to the balance sheet, we remain comfortable with our cash and liquidity position.
We ended the second quarter was 66.4 million in cash cash equivalents and marketable securities with no debt.
Now moving onto our outlook.
We see this quarter as an inflection point in our overall business.
We see that strengthened our traditional genetic testing and opportunities and sequencing as a service business.
And we see high demand for our picture platform.
And we see very high demand for our coated products and services.
First of all we are seeing our customers appreciating are clear differentiation by the application of our technology platform.
We made overall testing more affordable with average ASP is now below a $100.
Combined with our robust offering and quality, which is creating more demand.
And do our technology platform, we're able to exponentially ramp up capacity maintained turnaround time within 24 hours.
And operate a business, which is generating returns for the shareholders.
As many mentioned the recent global crisis has stress tested the viability of many business model and the same stuff has elevated fulgent technology on science the forefront that's a shining differentiator.
Based on the explosive demand, we're seeing from the market and the quality of our customers.
We continue to see the upward trajectory and transformation of our business continuing for the balance of 2020.
We now project test volumes for the year to be over 1.3 million, which translates into over a $120 million on revenue.
With the extreme leverage in our model that translates into expanding GAAP net income and excluding stock based compensation that as non-GAAP income of approximately 25 million.
Approximately a one dollar per share for our shareholders.
And fiscal 2020.
Because of the transfer may have expansion of our business.
And I expect that outlook ahead, we recently entered into a purchase agreement for 62000 square foot building for approximately 15.4, knowing and and El Monte.
This building is on the same street and less than a model away from our temple City building.
For several years, we have lease a few flatten the El Monte location.
Software engineering and administrative department, so we're very familiar with the building.
More than doubled the face of our temple city building, the extra room and configuration should bolster capacity and efficiency in our operations by a factor of at least 200% compared to our pump off and building.
Translating into a bench fall.
60000 tons per day in total.
We will maintain our lab and temple city, which currently has the capacity of 30000 tests per day, hence the El Monte building will be an expansion of our footprint and the Los Angeles area.
Aside from our previous experience.
As an aside from our previous experiences business operators.
Lang myself and our COO have been through a similar situation at our prior company Cogent.
Our seventh of 911, we utilize software to differentiate and leverage our business center primer crisis and stress.
We implemented numerous systems for global client well in excess of $100 million per implementation.
We have 20 plus quarters of profits and returns for that business consistently delivering operating margins of approximately 25% to 30%, which generated over the quarter billion dollars, our cash to our balance sheet at that former company.
As a final note we appreciate our patient shareholders.
Who have had based on us over the last four years since going public and we look forward to share an update to our business in the future quarters.
Thank you for joining our call today, operator, you can now open it up or question.
Sure, so ladies and gentlemen, keeping the black.
At this time.
Chris this margin or in the mid Western digital here, let's kick until 10 teachers machine has been answered all you wish to remove yourself from the Q price Downs.
Your first question comes from the line, that's the Somo gene them with BTI heat two lines now.
Hi, Thanks for taking the questions I'm congratulations on a phenomenal quarter and also thank you for everything Youve I think doing around Kobe testing.
Maybe just a few questions in Colby testing.
With curious about.
The difference.
Offerings you have.
The three end to end what based solution on as you look out for the balance of the or and beyond how do you see those.
The mix of the three different types of I guess forces for testing opportunity would be a pretty evenly split situation or do you anticipate more volumes through.
No.
When it that was more than others.
Brendan with you pick the corporate yeah, certainly eight thank you sandy.
Great question, we actually probably have more than three different options at this point, but it will focus on sort of the three main modalities.
Which is sort of the.
Professionally administrative tasks like from a from a hospital or a clinic the dry through into the walk us in the at home testing and we'll add sort of that backlog going back to work programs. So currently.
We're seeing a lot of volume from the drive through testing facilities, which are being run amazingly by these municipalities and getting a lot of people access to test and they need.
But looking forward.
As the country continues reopened we're seeing tremendous demand in necessity for back to work and back to school testing. So we've actually developed a two platforms to assist that here at project, which is our employees everyday on one of those platforms, it's extremely convenient.
I think the back to work in the back to school, it's probably going to be that's the one of the larger growth areas for Cowen I think I think going forward, we think thats incredibly important.
To continue to.
Hi, just pandemic for contact racing for monitoring now, we're seeing large corporations that want to test or employees. Once a week, sometimes three times a week and these solutions that we've built make it so easy for them to do that.
You're welcome to attestation scan your employee badge Scana to swab yourself walk away Latin America employee. So I think we're really excited to continue to help with the back to work in the back to school, helping our teacher, helping our students.
And I was maybe turn back to me if he has any additional comments I think it was in addition, we do offer the IBG ramps through digital test before the laboratories. We also continue intense but our ngs capabilities for the research organizations as well as the pharmaceuticals.
So we see laudable opportunities ahead of us in the pandemic to frighteningly citizen condemning.
Of course are we continue adding our capabilities and the will update for the wall Street above that we're in new initiatives.
Fantastic how do you guys into a lot of my questions on Colgate, but maybe one follow up on the routine testing on it sounds like there's a lot of variability in terms of how different orientation institutions are on implementing that is that the case in terms of already a lot of variability across different routine testing strategy.
If there are the recommendation in terms of whats ideal you could kind of walk through that that would be helpful.
Yeah, It's a great question I.
I think there's some sort or general practice guidelines that are out there exporting a lot of variability.
I'm, probably not that everyday.
I want that three times a week once a week. So we see some variability there what are the things that's really been differentiated here holes in is the fact that we do have one of the only FDA approved at home test. So not only can we test the employees at their place of work pulling that work from home or perhaps employees that has set the pace.
During the past if we need to mail a kit to their house for routine monitoring until they get a negative result, we can do that so.
Yes, I still think the country is trying to figure out perhaps the best testing protocol, how often a test how to administer it but I think most importantly, we develop multiple different platforms and solutions to make essentially all of them much easier.
And then essentially we also work with our partners we are not the only one.
Cargo well over two.
Coal to offer to fully end to end.
At home test correction.
Processing understanding of the results.
We also have a partners.
They are individually certified with the there at home test kits and those organizations are also partnering for US we provide the back into service before the level reprocessing for several customers in that field.
And the early wells puzzles Zankel, we filed the Uli application together the two the front end collection, we do like in the process.
Fantastic and then just lastly from me great to hear about the capacity expansion given the significant demand in testing.
Was wondering kind of I don't know if it's premature to think about it but how do you see the sustainability of Koby 19 testing beyond this year.
We are building out the capacity IDR strategies in terms of obviously it sounds like you did everything.
That pretty minimal investment on your part but at the same time as you look out further.
Got to redeploy the capacity you have for other applications in the future accurately by just thinking at that point.
Thank you send you send you visit good question.
Technology as we enable us to too many opportunities.
Oh, we are ready for that currently to processing for coal 19.
The infection reserves decreases in though we could do a similar.
Putting effects as some of the other large less tried to resolve the capacity. Each currently we do not have capacity issue, we could easily extending our capacity.
We do another comment any single vendor.
Our supply chain, we do not have a material shortage, we do not have reagents short shortage issues and in as measured effect majority, but Asia reagents, we produce over so.
Okay.
So that's the area. The second thing is just.
I just gave him the coal 19 and that is the where ratio could come and also pertains to the other.
The infectious diseases for coming we've had we've prepared for the worse before we see growth of something better in those events, we have a new technology. We're fighting the more you ace two prepares for Viking doses doses.
Potentials of offerings, but in terms of in general.
Our technologies is ready.
You can see beginning the people in this industry spend hundreds of millions dollars tried to open up for the insurance of contracts.
Because literally they are worse than the Las Vegas slot machine at least number slot machine you through a 100 double in UK for a few cycles have come back are you still probably have 50 sales coming back, but certainly with the the companies in this market.
So 100 dollar again, you feel to get anything come up.
But the effect.
But our were technology during this the pandemics.
We cover the insurance industry. They knew who was operator, who can effects efficiently to operate in this space produced record results and that was a sustainable business model.
At a $70 million that we generally because of 20% operating margin.
We continue for cost of our work business will improve the are often manager because our technology. So we're confident in this space.
For the genetics is important and crucial to the healthcare industry certain genetics, we believe the way we're not only to lead to begin the technology, but it also demonstrates that this is a model or sustainability and that came with a money returns back to our shareholders Oh lag.
The people.
Thats a waste.
So some money.
Well.
And then Patrick Thank you so much.
Again, ladies and gentlemen, if you had the question at this time. Please press Star then to number one key on your such Tim Thompson.
Again Dec star one to ask a question.
Your next question comes from the line, it's keeping up with Piper Sandler Hugh lines now.
Okay. Thank you hey, guys congratulations on a quarter good stuff there.
Thanks, David.
Yeah, Okay. So maybe just to start off of the non covered 19 question, but it sounds like your your core genetic testing businesses had as hung in there it's gone back up to kind of normal levels.
Has there been any any disruptions with.
Hey nodes since complicated.
Testing and you guys have hired a lot of employees has there been any any any disruptions in getting out your your accord genetic tests.
I know there seemed to be a big rush to get to covert 19 results out but hasn't been any impact on the core genetic testing business.
It is with workers.
Yes, Steve is work of the question.
But that over both the answers the mill, Okay. We will be maintained our key piece of for our traditional genetic this business.
And the we have a initiatives both of our production lines of for the code I can relate to the business. We see those are both traditional business. A few T is as important as our company, culminating with the business you have anything no I think your first response main was no. The answer is no Stephen it hasn't so.
The processes are quite a bit different as you can imagine and we've done a really good job automating the process encoding 19.
But the short answer is no I mean, we've continued to meet our turnaround times continue to see a rebound in our core business.
A combination of some pent up demand and bringing on several new customers and good execution by their business and the sales team.
So the lab here is.
It's it's it's operated and just an incredibly impressive manner. We did 180000 test in Q2.
Almost no hiccups whatsoever, and I think arguably the best turnaround fibrek over 19 in the United States.
So I mean, I, just really proud of the lab really proud of the operations and.
I look forward to continuing to leverage the technology to continuing do the type testing.
No that's great and then okay. So maybe half pivoting over to capacity. So yes noted that you you're purchasing a new building.
You said you can scale eventually to 60000 tons per day.
How long should we think about the new building getting up to.
In terms of getting up to speed I know you have begun to be CLIA lab certified.
Can you give us or something the timing.
Yes, I'll turn it would fall into the second but I'll comment on the clear license.
They've actually got a wonderful job expediting CLIA licenses for Copel 19 laboratories, so actually it's just a matter of days at this point if you have any way you're going to call. The 19 testing, so I really applied them for cutting the rotate and allowing it to get clear licenses and an expedited manner, but in terms of the timing of any facility our politics that question.
So Steven.
Starting from the Temple city location that location has the capacity of up to 30000 tons per day.
What's the new El Monte building.
We believe that that has an eventual capacity of up to 60000 test per day, but that's not going to happen.
All at one time, we think that by the end of a year wont be able to calibrate the El Monte lab to habit process up to 30000 tons per day growing to 60000.
As we calibrate and expand that lab.
I see okay no that's helpful.
And.
Okay and then.
The test breakdown I don't know if he can share this share this with us, but can you give us a breakdown of.
Sort of the mix in the corporate 19, Pes, RT Pcr versus that home versus versus Ngs.
Yes so.
Yeah. So.
Ill give you I'll give you a breakdown so out of the.
Out of the.
Added a 17.3 million right of revenues that we've had.
Got a 60 40 split 60% divesting co bad and 40% roughly 40% thing non cobot.
And then what them to 60% the vast vast majority.
RT Pcr.
The at home or the picture. It is getting tremendous demand, we actually think that the growth for that platform might even be higher than what we see for traditional RT PCR and then for the Ngls, we do have some business for that but it's a very very small.
All piece, we think about will grow overtime as we.
Make our capabilities known what the pharma organization.
Okay. That's helpful and then.
As you talk about.
Your outlook and apologies, but I had a bad connection I think you said Paul.
You have contracts for 1.3 million tests in 2020.
Yeah.
[music].
No. So what you what what to do.
We have secured the supply chain from all angles right, so capacity as well as supply is not an issue for the company.
As far as our outlook for the year. What we said was we protect us to do over 1.3 million tap for the balance of 2020, which translates into more than $120 million of topline revenues for the company.
I see okay. So so in other words, if you add up to one in Q2, right, we did roughly $25 million.
Revenues, so that leaves a delta of 95 million for the year for us to make the 120.
So we anticipate doing close to $100 million of business.
For Q3.
Q3, and Q4 right, our combined and if you wanted to get a little bit more flavor on how they trajectory is kind of luck.
Point in time, we see Q4 being approximately 10% higher than Q3.
Okay.
Okay and on.
On the long on the contracts you guys refining school health care facilities.
Can you give us a sense of how long did contracts before.
Yes, Stephen it's Brandon they range anywhere between.
Three months to 18 months.
There's a pretty loud pretty large variety in there.
Okay.
Yes, yes that makes sense of what I've been hearing.
From others and that people want him to lock down their testing so okay. So that makes sense.
Okay. Those are all the questions I have I appreciate you guys, taking the time and congratulations again.
Thanks, David.
We have new for any question at this time, ladies and gentlemen. This concludes today's conference. Thank you for your participation had wonderful date you may disconnect.
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