Q1 2021 Trxade Group Inc Earnings Call
Good afternoon, ladies and gentlemen, thank you for standing by and welcome to attract aid groups first quarter 2021 earnings conference call. During today's presentation, all parties will be in a listen only mode.
And the presentation and the conference will be opened for questions.
Earnings Press release accompanying this conference call was issued at the close of market today.
Quarterly report, which includes the complaint for adults for operations for the <unk>.
Quarter, ending March 31, 2021 was filed with the S. E. T. Today on our call today attracts a group founder Chairman and Chief Executive Officer, Sarah and a jar of cool and Howard Dos and Chief Financial Officer for replay of this call and webcast will be available for the next 30 days on the Companys website.
Under the NASDAQ Meds and link the company Web site also includes more supporting industry information.
At this time I'd like to turn the call over to Howard Dos The company's Chief Financial Officer.
Howard the floor is yours.
Thank you operator, and thank you for joining us today I'd like to welcome you to our first quarter 2021 financial results conference call.
Our press release announcing our first quarter financial results was issued after the close of market today and is posted on our website.
We have furnished such press release to the SEC on form 8-K.
Statements made on this call and webcast, including forward looking statements. These statements include but are not limited to our outlook for the company and statements that estimate or project future results of operations or the performance of the company, including the potential impact of COVID-19, and the company's business and results.
Operations.
These statements speak only as of the date hereof and the company assumes no obligation to revise any forward looking statements that may be made in today's press release call or webcast.
These statements do not guarantee future performance and are subject to risks uncertainties and assumptions. Please.
Please refer to the press release and the risk factors and documents, we file with the Securities and Exchange Commission, including our most recent quarterly report on form 10-Q for information on risks and uncertainties and assumptions that may cause actual results to differ materially from those set forth and such statements.
In addition, during today's call and webcast, we will discuss non-GAAP financial measures, which we believe are useful as supplemental measures of <unk> performance.
Non-GAAP measures should be considered in addition to and not a substitute for or in isolation from GAAP results.
You can find additional disclosures regarding these non-GAAP measures, including reconciliations with comparable GAAP results and our earnings press release.
Unless otherwise stated all financial comparisons and this call will be our results for the comparable period of fiscal 2020.
At this time I'd like to turn the call over to Serena jar pool, the company's Chief Executive Officer, Sir and the floor is yours.
Yeah.
Thank you Howard.
2020 was a breakthrough year for our growing health services company.
As we continue to innovate grow and expand our platform company and then.
And that growth continued into the first quarter of 2021.
We saw a 39% year over year and growth and the first quarter of 2021, despite the ongoing challenges caused by the COVID-19 pandemic.
And I'm extremely proud on for team for their tireless and Ford to drive for one of our business.
And Thats put a success and the near term.
In addition, an exciting suite of affiliated services from our comprehensive telehealth solution digital health passports, and enabling a safe reopening with and attract to pay per scan business model continued to boredom and broaden our reach as a company and pony independent pharmacies with technology.
And to make them and indispensable local health hubs.
Yeah.
Before we do any more detailed walk through our financial and operational and it goes for the quarter for those of you new to this company I'd like to walk you through who we are how we are just realizing the retail pharmacy experience through the optimization of drug procurement and prescription journey and patient engagement.
Prior to the launch of taxied, obtaining drug courts, and independent pharmacy was an extremely laborious and timing efficient process at the moment.
And our transparency and to a fair market price or what others are paying for the same drug.
Traditional wholesalers would provide unfavorable payment and times slow delivery and created difficult conundrum for the approximately 21000 independent pharmacies nationwide.
We identified this opportunity as.
As well and credit with potential and these independent pharmacies, which together are maintained at around $73 7 billion and annual purchasing power for us either to launch traction.
We designed one and operate and business to business web based market platform, bringing together the nations independent pharmacies and creator national pharmaceutical suppliers to provide a uniquely efficient and transparent buying and selling process.
Our platform independent pharmacies, no for Darren ceiling, and free enterprise from competing suppliers and Hefei and payment terms and often with next day delivery service.
We believe this radical price transparency and economy of scale and competition amongst suppliers needs up to a 10% reduction and a pharmacy total annual drug purchase costs and drug level savings of up to 90% and center and pharmaceutical products.
Our platform sales and pharmacy from having to manually compare prices across and distributors saving hundreds of hours of unnecessary labor annually and a.
Eliminating negative reimbursement are fulfilling and prescription and a loss.
Our revenue model is simple.
Paid and administrative P of 6% of the buying price and a generic pharmaceuticals and up to one person and brand pharmaceuticals and pass through our pharmaceutical platform similar to Paypal, a reset like model.
Today, we've seen incredible success and garnering attention from independent pharmacies for nationwide.
Elevating our business model.
We currently have around 12100, plus registered members on our platform with.
223 annuity and members added in Q1.
We have eliminated our significant such us since the launch of aforementioned marketplace platform go moving.
And just and complementary businesses, where we can leverage our strong retail pharmacy network and core competency and technology.
These include bottom health, our telehealth subsidiary as well as the mail order pharmacy, and Rx and distributor, which acts as the enabling infrastructure for <unk> business to business platform.
With that we have been anything but the idle in 2021 and I've been pounding the pavement to broaden the reach of our bottom help.
Partnerships signings strategic partnership with the brand name nationwide stores, such as Kenny Drugs Pro Act brochure and grocery company spot and Nash and most recently big buy for to build a truly national platform.
Approximately 500, plus stores off of bottom outside research 2000 from users and all 50 states and we expect to continued growth and the quarters to come as we ramp up strategic partnerships and anticipate an increasing number of employers turning to our turnkey telehealth solution.
We continue to integrate.
Exciting new solutions and to the bottom health offering, including a direct to patient prescription drug coupon platform through our partnership with single care.
And.
And kind of ability to screen patients collaborators directly into the bottom health virtual electronic medical records and remote patient monitoring.
These product enhancements paired with our digital marketing strategy, which we are ramping up for wireless with excellent and and access and to a new key markets alongside our enterprise retail partners.
And particularly pleased to announce a new subsidiary net checks and next important step in our parent company branding of leading IP health services companies.
Med checks and will offer digital health information solutions, starting with the health passport App, that's being launched as day.
Peace of mind solution to share.
Lastly, and securely reopen the global economy.
Okay.
To head up med checks and brought.
For the onboard technology export <unk>.
<unk> James for them.
There is no one better suited than James and he has leadership experience and the travel tourism and National security and location based entertainment industry.
Under his leadership and Med Tech and digital health passport will leverage what state of the art conviction and blockchain technology to conceal all private health data and having the secure exchange of information between passport holder and clarify it.
We are evaluating initial rollout locations domestically and internationally with a pay per use model.
I think you all will agree that the metrics would be a significant revenue driver in 2021.
As we continue to scale and exciting new affiliated Servicers, such as our telehealth platform at our recently announced digital health passport initiatives.
We anticipate continued top line growth and becoming.
And the capital market front.
We were proactive toward the first quarter of 2021 and attending for interest per contract.
The H C Wainwright Global Life Science Conference.
And the Roth growth conference.
Maxim group and maintain growth conference and the planet Microcap showcase.
All with the goal of enhancing broader investor awareness of our company.
I would like to now turn the call over to our Chief Financial Officer, Howard Das to walk through some key financial highlights from the first quarter of 2021.
Thank you Sir and.
Revenues for the first quarter of 2021 increased 39% to $3 $1 million as compared to revenue was up $2.2 million and the same quarter last year.
The increase in revenue was primarily due to higher sales by the companies Integra pharma solutions subsidiary.
Gross profit and the first quarter of 'twenty, and 'twenty, one totaled $1.4 million or 45% of revenues compared to gross profit of $1.6 million or 74% of revenues and the same quarter last year.
The decrease in gross profit was primarily attributable to the cost of personal protective equipment related to products sold in the current period, while the revenues from the trackside platform have no cost of sales.
Operating expenses and the first quarter of 'twenty or 'twenty, one or $2 million.
Compared to $1.5 million and the same quarter last year.
This change is primarily due to I T development legal expenses and marketing expenses related to the recently launched bottom health and med checks platforms.
Net loss and the first quarter of 2021 was point $7 million or eight cents per basic and diluted share outstanding compared to net income.
Point $2 million or three cents per basic share outstanding and the same quarter last year.
Adjusted EBITDA, a non-GAAP financial measure decreased 244% to negative <unk> 5 million for the first quarter compared to a positive point for millions and the same quarter last year.
Looking at the balance sheet cash and cash equivalents for $5 2 million as of March 31, 2021, compared with $5 9 million as of December 31, 2020 we.
We do not currently foresee a need for further capital to support our business.
I'll now turn the call back to serve and for closing remarks.
Thank you Howard.
Through the year, we continue to drive for one of our business achieving several key milestones in our internal road map.
And the focus on innovation and development to various complementary growth opportunities.
We believe we are incredibly well positioned as we stand today.
For us to monetize several emerging revenue streams and nation to the steady progress made by our high margin core exchange platform.
This is an exciting time for Taxane and I look for to go through operational execution and the months ahead, and we see as we seek to create sustainable long term value.
A shareholder.
And then I'll turn it over to the operator to begin the question and answer session operator.
Thank you Sir we will now begin the question and answer session. As a reminder, if you have a question. Please press the star followed by the one on your Touchtone phone and if you relate to withdraw your question press. The star followed by two and if you are using speaker equipment, you'll need to lift the handset before make.
And your selection one moment, please while we poll for questions.
Okay.
Thank you. Our first question comes from Allen Klee with Maxim Group. Please proceed with your question.
Good afternoon.
Good to see the number of new pharmacy customers added dropping to the bottom line total number.
I'm, assuming that means that you have.
Not seeing kind of day attrition you saw last quarter.
But focusing on the day.
True.
<unk> platform segment.
Could you talk about what you're hearing from your customers in terms of.
The impact of the pandemic on kind of a less sales volume.
And.
And lighter flu and cold season, but but how the outlook would be for them of our spending for for drugs going forward and the outlook to kind of be adding new.
New pharmacies. Thank.
Thank you.
Sure.
Good afternoon, and again, thanks, Allentown and that's a great question and he was still an impact of COVID-19.
And there's a lot of supply chain disruptions.
And especially the these pharmacies make lots of money on the genetics.
And can worry less on the brand so the house, depending on the brand sales force with generic sales.
We saw that and the first quarter and it would probably may continue to see and the second quarter, probably that can change depending on how it's going to impact that you guys are fine.
The biggest are generic manufacturers and India and currently that are the big impact of COVID-19 and India and other raw material comes from China has also impact.
So to answer your question, we May see continues to see this COVID-19 impact, but the outlook is probably towards the third and fourth quarter and going into 2020, a day as we keep on doing the vaccinations and here domestically as well at us and India and other parts.
The outlook is improving.
Yeah.
Okay. Thank you al.
Go back and the queue and ask some questions later thank you.
Thank you. Our next question comes from Jean Manhattan, and its causing your Securities. Please proceed with your question.
Thanks, Good afternoon, Saran and Howard.
Of the of the 12001 hundred members that you talk about how many of those are active lead generating revenue today.
But we continues to see and a positive activity. If you go all night and 90 days I'm, probably at all and.
8000 for 9000, and the reason is it takes US a 12 to 15 months, even though the and sign up as a member before they actually buy onto our platform.
Okay, Okay and helpful to understand that.
And.
You touched on this briefly with the last question, but I mean I do note your platform revenue was down sequentially and year on year.
You talked to that of COVID-19 impact there. So I'm just wondering has there been any change in your take rate or your administrative fee that you collect on the platform too to account for the revenue decline.
Sure that you're aware of and administrative fee is a 5% non regenerative side and less time and one person on the Brian So the more the pharmacies, Brian more brand and our revenue and fall, even though the top line transactional volume may increase, but I would revenue will fall. So it's where they stay vital more generics would make them more revenue.
And where it says the bad drugs.
Okay, So you're you're suggesting there and if I'm if I'm hearing you right that.
Due to the COVID-19 situation in India and elsewhere, there was a bias toward more branded drugs and the quarter. So therefore, you you wouldn't you wouldn't collect as much on those is that right.
That's correct okay.
Okay great.
And with respect to the P. P E revenue.
Which looks to be the majority of the revenue in the integrity units. This.
This quarter my sense was that that was winding down and so was it.
This type of sales weren't something you necessarily wanted to be and that business, but it looks like that was there was a resurgence of that in the quarter. So I'm just trying to for.
For modeling purposes, trying to understand where that number's going to wind up for the balance of the year any any help you can provide there would be great. Thanks.
Sure.
Not the majority chunk and I'll I'll, let Howard answer about its more still 70% 75%.
And I came from the our traditional platform versus only 20 or 22% revenue came from a P. B cells. So it's.
And winding down and whatever we left off and our inventory we'd get write off that so we're not actively pursuing any P. P business and we still stick to of course to all of our technology business. That's what he is and if we look at it from the last quarter to this quarter and where gross margin include for me and.
30, mid thirties to now 45% so weird for.
And away and the P. P E business and stay focus on the technology side.
Okay, great. Thank you.
Thank you.
Yeah.
And as a reminder, if you would like to ask a question. Please press star one on your telephone keypad.
And he was late to remove your question press Star two.
Yeah.
Our next question comes from Howard Halpern with <unk> Brothers. Please proceed with your question.
Good afternoon guys.
Oh, Hi, good afternoon all.
So with that with the spending on technology and marketing. She should we continue to anticipate and now there's 2 million are in SG&A.
And SG&A costs should be maintained throughout the next couple of quarters.
Oh, yeah, absolutely a continuous to put investment into the hour of both the platforms bottom halt and med checks, yes, that's already like position, yes, unless and until they start generating cash flow to what expenses are what are they the same correct.
Okay, and and you know.
You have I guess 500 stores and you know offering bottom hell.
You know with all your efforts going on when do you really see you know everything starting to gel and.
You know gaining some.
Meaningful revenue in the <unk>.
And for you know buying them health and Dan and I guess med checks will follow after that.
Sure the bottom hole, that's even though we engage these pharmacies or the 500 stores now it's the actual time. These stores are actually pushing to their existing customer base are talking about the bottom half and they're walking into the stores, that's cause or whatever it's a new product that we and introduced into these stores.
And at the same time for the stores also introduces a new product and.
And that's what he said and you haven't seen any of those revenues and.
And the first quarter or we don't anticipate it and next a couple of quarters, probably towards the end of the year, we'll try to see the revenues and the downloads and so on and so for the improvements are taking our traditional independent pharmacies, plus there's a chain stores and as I mentioned, and Kenny and spot and Nash and <unk>.
Big lie and those kind of stuffs.
Oh, Okay. So so basically and as we enter I guess the end of the year and next.
Next fiscal year, you anticipate a revenue.
And he generated from these high margin areas will produce to let you know you'll have to leverage that.
You know you'll get towards our operating income and GAAP profitability in 2020 two.
And that's over a whole putting all trying to continues to improve our bottom line correct.
Okay, Okay, well keep up the good work guys. Thank.
Thank you.
Thank you.
Our next question comes from Allen Klee with Maxim Group. Please proceed with your question.
Hi, yeah going back to Integra.
I was just trying to understand you said that 75% came from your traditional platform did you imply by that that the growth and integra came from the traditional more than from P. P. E. And then also on that last quarter you talked about.
The new offering of trucks, a prime and you had some startup costs associated with that.
Could you talk about kind of how that went for the quarter.
Sure detract from Prime and still at a nascent stage and so do we need to still need to get some licenses like the EBITDA W. D, which is called ward and where.
And it continues to go into that and salaries and whatnot.
And so that's the reason you haven't seen the big impact of the trucks are prime but there is some revenue, but it's in the program and has not fully has taken and shape and we anticipate that it would have taken shape and second and third quarters.
Yeah.
[laughter].
Okay.
The increase and in the first quarter from Integra Farmer did this come from the.
70% to 75% traditional type of thing or was it for.
Yeah, I'm, sorry day times a day.
Oh and I mentioned.
On a total 100 person revenue of 70% to 75% of these are traditional day to be platform and data revenue and remaining 20 to 25, that's created from Integra, there and 100 per cent PPE, although they can tegra and taking it up tracks and prime towards the Integra has some revenues and a very little P. B and the platform revenue b to b that comprise.
And it's 100% of arriving at reported one menu.
Okay, Great and then one bonum health you talked about adding two.
New features to it.
Streaming the lab results too.
And your.
Electronic medical records and.
Remote patient monitoring could you go into that a little bit more specific like what this does for customers and and what you're actually doing with patient monitoring.
Sure those programs and I'm still under development, what eventually what we Gotta go and where this is for example.
And for taking the tests and test and COVID-19 testing and as well as vaccination, even though the metrics offers a full blown vaccination, but they and sometimes you go into the clinic or doctor's offices and those are those can be updated and at the same day and remote monitoring. These some of these doctors and they need for their Medicare patient they have to visit the patient.
A 15 to 18 times those are the things, especially in the COVID-19 and.
Area and they want to the doctors has a monitoring them and remotely and they're using the bottom hub for us I think more monitoring tool. So that's still under and all of them and hopefully the second quarter, we'll see the actual remote monitoring and using bottom halt and these doctors offices.
Okay, Great and then last question on him to mute your community.
Segment can.
Can you just give us an update of where.
Where that stands and how you're making out with them getting state licenses.
Sure as I mentioned and understood their community specialty pharmacy is simple, we're going to use that as a new product launches has ever been.
And our testing site and.
It just continues to improve currently we have it on 'twenty for state licenses.
And the process of getting up to 30 to 35 state licenses that's how it goes this year.
Okay, great. Thank you so much.
Thanks, Adam.
Thank you there are no further questions at this time I would like to turn the call back to third and a jar of Hu Chief Executive officer for any closing comments.
And thank you operator I would also like to thank you all of you joining for our net earnings conference call and.
We look forward to continuing to update you on our ongoing progress and growth from unable to answer any of your questions. Please reach out to our IR from MZ group would be more than happy to assist thank you all.
This concludes today's conference call you.
You may now disconnect. Your lines. Thank you for your participation and have a wonderfully.
Yeah.