Q4 2021 InfuSystem Holdings Inc Earnings Call
Speaker 1: you
Okay.
Good day and welcome to the NP system preliminary fourth quarter and full year 2021 Financial result conference call all participants will be in a listen only mode.
Speaker 2: Good day and welcome to the InfuSystem Preliminary 4th Quarter and Full Year 2021 Financial Results Conference Call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing star, then zero.
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Speaker 2: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on a touch tone phone.
After todays presentation, there will be an opportunity to ask questions to ask a question you May Press Star then one on a touchdown pass.
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Speaker 2: To withdraw your question, please press star then 2. Please also note this event is being recorded. I would now like to turn the conference over to Joe Dorme, Managing Partner. Please go ahead.
Please also note this event is being recorded.
Now like to turn the conference over to Joe <unk> managing partner. Please go ahead.
Speaker 3: Thanks, Tom. Good morning and thank you all for joining us today to review the preliminary financial results of Infusystem Holdings, Inc. for the fourth quarter in year-end 2021, end in December 31, 2021.
Thanks, Tom Good morning, and thank you all for joining us today to review the preliminary financial results of <unk> System Holdings, Inc. For the fourth quarter and year end 2021 ended December 31 2021.
Speaker 3: With us today on the call are Rich Giorgio, Chief Executive Officer, Barry Steele, Chief Financial Officer, and Kerry Lecanz, President and Chief Operating Officer.
Today on the call are rich <unk>, Chief Executive Officer, Barry Steele, Chief Financial Officer, and Kerry with gas President and Chief operating Officer.
Speaker 3: After the conclusion of today's prepared remarks, we will open the call for questions.
After the conclusion of today's prepared remarks, we will open the call for questions.
Speaker 3: If anyone participating on today's call does not have a full-text copy of the press release, you can retrieve it from the company's website at www.infosystem.com or numerous other financial websites.
Anyone participating on today's call does not have a full text copy of the press release, you can retrieve it from the company's website at Www Dot info system dot com or numerous other financial web sites.
Speaker 3: Before we begin with prepared remarks, I'd like to remind everyone certain statements made by the management team of Infused Systems during this conference call constitute forward-looking statements within the meaning of the Private SecuritySmart SecurityFire modification and ACEPlan;;
Before we begin with prepared remarks, I would like to remind everyone. Certain statements made by the management team of <unk> system. During this conference call constitute forward looking statements within the meaning of the private Securities Litigation Reform Act of $19 95, except for the statements of historical fact this conference call may contain forward looking statements that involve risks.
Certainties, some of which are detailed under risk factors in documents filed by the company with the Securities and Exchange Commission, including the annual report on Form 10-K for the year ended December 31 2020.
Speaker 3: Some of which are detailed under risk factors and documents filed by the company with the Securities and Exchange Commission, including the annual report on Form 10-K for the year ended December 31, 2020.
Speaker 3: Forward-looking statements speak only as of the date the statements were made. The company can give no assurance that such forward-looking statements will prove to be correct. Infusystem does not undertake and specifically disclaims any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise. Now I'd like to turn the call over to Rich Diorio, Chief Executive Officer of Infusystem.
Forward looking statements speak only as of the date. The statements were made the company can give no assurance that such forward looking statement will prove to be correct.
System does not undertake and specifically disclaim any obligation to update any forward looking statements whether as a result.
New information future events or otherwise.
Ill turn the call over to rich Diiorio, Chief Executive officer of MTS.
With revenue of <unk>.
Speaker 4: with a revenue of $102.4 million. While that number is certainly not what we expected for the year, we remain very confident in the continued strong growth potential of the business.
$102 4 million.
While that number is certainly not what we expected for the year, we remain very confident in the continued strong growth potential of the business we.
Speaker 4: We are transforming the company for long-term success in facilitating the clinic-to-home last-mile solution in biomedical services for hospitals in North America.
We are transforming the company for long term success and facilitating the clinic to home last mile solution and biomedical services for hospitals in North America.
Speaker 4: As I will discuss shortly, some major initiatives that were expected to contribute to our fourth quarter have slipped into 2022. This was largely, but not entirely due to the impact of steeply rising COVID cases starting in November . While most of America largely avoided a repeat of the 2020 shutdowns, the healthcare sector was impacted by Omicron in ways similar to that seen with earlier waves of the virus.
As I will discuss shortly some major initiatives that were expected to contribute to our fourth quarter has slipped into 2022. This was largely but not entirely due to the impact of steeply rising COVID-19 cases, starting in November .
Most of America, largely avoid a repeat of the 2020 shutdowns the health care sector was impacted by <unk> in a way similar to that seen with earlier waves of the virus.
Speaker 4: Before continuing further, I would like to take a moment to thank the members of the InfuSystem team, who once again show their professionalism and dedication to our patients and providers that we serve. What we do is important and I am proud to be a part of it.
Before continuing further I would like to take a moment to thank the members of the NP system team.
Once again showed their professionalism and dedication to our patients and providers that we serve what we do is important and I am proud to be a part of it.
So we know going into the fourth quarter.
Speaker 4: that we had to get a lot done to deliver against our guidance. We started the quarter confident because we had some very good momentum going into year end. There was the exclusive agreement with a leading West Coast health care provider for our pain management solution. And we expected to close some larger deals for negative pressure wound care equipment before year end. On top of this, it was normal to see the number of elective surgeries rise at the end of the year due to people taking advantage of the annual cycle with their health care insurance deductibles.
That we had to get a lot done to deliver against our guidance. We started the quarter confident is we had some very good momentum going into year end. There was an exclusive agreement with a leading west coast health care provider for our pain management solution and we expect it to close some larger deals for negative pressure wound care equipment before year end on top of this it was normal to see the number of elective surgeries rise at the.
End of the year due to people taking advantage of the annual cycle with their health care insurance deductibles.
Instead of the expected increase in activity during the fourth quarter, our business experienced a rapid deceleration of XOMA omicron cases exploded, although not to the extent seen when Covid first appeared in early 2020, the health care community took actions they thought necessary to focus on the potential emergency this.
Speaker 4: Instead of the expected increase in activity during the fourth quarter, our business experienced a rapid deceleration as Omicron cases exploded. Although not to the extent seen when COVID first appeared in early 2020, the healthcare community took actions they thought necessary to focus on the potential emergency. This included reducing access to facilities, curbing elective surgeries, and deferring contract signings in the onboarding of new products and services. We felt the impact of these effects in almost every product and therapy across both platforms.
This included reducing access to facilities curbing elective surgeries and deferring contract signings and the Onboarding of new products and services. We felt the impact of these effects in almost every product and therapy across both platforms.
Speaker 4: In oncology, new patient starts dropped off after Thanksgiving. Pain procedures did not scale at the end of the year. And wound care contracts we thought would be signed in December , slipped into 2022.
Ecology, new patient starts dropped off after Thanksgiving pain procedures did not scale at the end of the year and wound care contracts, we thought would be signed in December slipped into 2022.
Speaker 4: These unforeseen headwinds negatively affected our ability to gain the expected business traction, causing us to fall short of the expected combined urine, runery, for pain and wound care.
These unforeseen headwinds negatively affected our ability to gain the expected business traction, causing us to fall short of the expected combined year end run rate for pain in wound care.
As you can see from reading the management discussion section of this morning's press release, despite the year end slowdown our revenue did still come in materially materially above last year's levels. Our fourth quarter revenue was actually up seven 3% versus the prior year. Our business is perfectly sound, we just experienced a temporary break in our growth momentum which much of.
Speaker 4: As you can see from reading the management discussion section of this morning's press release. Despite the year-end slowdown, our revenue did still come in materially above last year's level.
Speaker 4: Our fourth quarter revenue is actually up 7.3% versus the prior year. Our business is perfectly sound. We just experienced a temporary break in our growth momentum, which much of this due is due to the unexpected impact of Omicron in the fourth quarter.
This is due to the unexpected impact of <unk> in the fourth quarter.
Speaker 4: As I'll discuss shortly after Barry is finished with his discussion, we see our revenue momentum coming back strongly in 22 and into 23.
As I will discuss shortly after Barry's finished with his discussion we see our revenue momentum coming back strongly in 'twenty two into 'twenty three.
Speaker 4: InfiSystem is very well positioned in the marketplace as a solutions provider, and we continue to see many attractive opportunities. Our business grew by approximately 20% in 2019 and again in 2020. And we see the business returning to 20% growth in 2022, and we are very well positioned to make that happen.
NP system is very well positioned in the marketplace as a solutions provider and we continue to see many attractive opportunities our business grew by approximately 20% in 2019 and again in 2020, and we see the business returning to 20% growth in 2022, and we are very well positioned to make that happen.
We feel like we're a runner at the starting line ready and eager for the signal to sound. So we can get going execute on our plan and the opportunities in front of us now.
Speaker 4: We feel like we're a runner at the starting line, ready and eager for the signal to sound so we can get going, execute on our plan and the opportunities in front of us.
Speaker 4: Now, I'd like to turn it over to our CFO , Barry Steele, who will provide a review of our preliminary financial.
Now I'd like to turn it over to our CFO , Barry Steele, who will provide a review of our preliminary financial results.
Thank you rich and thank you everyone on the call for joining us today.
Speaker 5: Thank you, Rich, and thank you everyone on the call for joining us today. I'm gonna focus on two areas, the main drivers for the current quarter's results and the status of our financial resource reserve.
I am going to focus on two areas. The main drivers for the current quarters results.
Sure I can answer a lease loss reserves.
Speaker 5: First, let me touch on our financial results for the fourth quarter. Net revenues for the fourth quarter of 2021 totaled $26.5 million, representing a 7% increase from the prior year fourth quarter. This amount was nearly tied with our highest quarterly revenue ever, a record freshly minted during the 2021 third quarter, and also beating our best quarterly revenue amount in 2020, when the panic of COVID-19 significantly accelerated market demand for infusion pumps. Growth drivers included
Let me touch on our financial results for the fourth quarter net revenues for the fourth quarter of 2021 totaled $26 5 million, representing a 7% increase from the prior year fourth quarter.
Nearly tied with our highest quarterly revenue ever a rapid freshly minted during the 2021 third quarter and also beating our best quarterly revenue amount in 2020 on that.
COVID-19 significantly accelerating market demand for infusion pumps.
Growth drivers included revenue from the acquisition.
Speaker 5: increases in pain management and negative pressure wound therapy revenues, and strong treatment volumes at patient collections in a cow's.
<unk> and pain management and negative pressure wound therapy revenues of spa treatment volumes at patient collections and oncology.
Preparations for the new large biomedical services agreement.
Speaker 5: Preparations for the new large biomedical services agreement continued to create additional costs during the quarter, totaling $700,000 in both cost of sales and general and administrative expenses that slightly diminish our gross profit and adjusted EBITDA margins and increase our GNX.
To create additional costs during the quarter totaling 700000 in both cost of sales and general and administrative expenses slightly diminish our gross profit and adjusted EBITDA margins and increased our G&A expenses.
Speaker 5: Other factors on favorably impacting profit margins included unfavorable gross margin mix related to the increased DME revenue from the two acquisitions and $800,000 in costs related to the increased sales team for negative pressure wound therapy and pain management, which started during the second quarter. A portion of this increase totaling $600,000 was included in selling expense with the remaining amount included in GNX.
Other factors on variable impacting profit margins included unfavorable gross margin mix related to the increased <unk> revenue from the two acquisition.
And 800000 in costs related to the increased sales teams for negative pressure wound therapy and pain management.
Started during the second quarter a portion of this increase totaling 600000 was included in selling expense with the remaining amount included in G&A expenses.
Speaker 5: Partially offsetting these were a decrease in our lost pump reserve in the ITS segment.
Partially offsetting these were a decrease in our loss pump reserve in the Ats segment.
And.
Speaker 5: a decrease to our management bonus expense totaling $2.2 million compared to the prior year.
A decrease to our management bonus expense totaling $2 2 million compared to the prior year.
Speaker 5: Turning to a few points on our capital reserves. We continue to be positioned well to fund our growth with strong cash flow from operations backed by significant liquidity reserves available from our revolving ladder credit.
Turning to a few points on our capital reserves, we continue to be positioned well to fund our growth with strong cash flow from operations backed by significant liquidity reserves available from our revolving line of credit.
Notwithstanding the strong position our growth capital needs are expected to be moderate markedly lower as compared to historical both periods. This is because our biomedical services revenue growth does not require us to purchase medical medical equipment or other capital items as compared to our Ics business.
Speaker 5: Notwithstanding the strong position, our growth capital needs are expected to be markedly lower as compared to historical growth.
Speaker 5: This is because our biomedical services revenue growth does not require us to purchase medical equipment or other capital items as compared to our ITSD.
At the end of 2020, assuming 2021 our total debt stood at $33 1 million, an increase of $2 $2 million at the end of the third quarter and our ratio of total debt to adjusted EBITDA for the last 12 months is 138 times.
Speaker 5: At the end of 2021, our total debt stood at $33.1 million, an increase of $2.2 million since the end of the third quarter, and our ratio of total debt to adjusted EBITDA for the last 12 months is 1.38 times.
A portion of this increase was due to 500000 and purchases of our own common stock under our <unk> are under our $20 million stock repurchase program.
Speaker 5: A portion of this increase was due to $500,000 in purchases of our own common stock under our 20 million stock we purchased.
We continue to be enthusiastic buyers of our stock at the current market prices.
Speaker 5: we continue to be enthusiastic buyers of our stock at the current market price.
Speaker 5: Our total available liquidity at the end of the quarter was $41.6 million and consisted of $41.4 million in available bar capacity under the revolving line and cash on hand. And with that, I'd like to turn it back over.
Our total available liquidity at the end of the quarter was $41 6 million and consisted of 41 4 million in available borrowing capacity under the revolving line and cash on hand.
And with that I'd like to turn it back over to Mr. Diiorio.
Thanks, Barry notwithstanding.
Notwithstanding the negative impact of <unk> in our business at year end 2021 was a strategically productive year with several developments that we believe will drive top and bottom line growth in 'twenty two and beyond.
Speaker 4: Notwithstanding the negative impact of Omicron on our business at year end, 2021 was a strategically productive year, with several developments that we believe will drive top and bottom line growth in 2022 and beyond.
Speaker 4: We started the year by expanding our capabilities with two biomedical services company acquisitions, Philamet and OB Health, in February and April respectively. We took advantage of a one-time situation and expanded our pain and wound care sales forces mid-year.
We started the year by expanding our capabilities with two biomedical services company acquisitions fill them and it will be held in February and April respectively. We took advantage of a one time situation and expanded our pain in wound care sales force as mid year in early November we announced an exclusive three year agreement for our pain management solution with a leading west coast health.
Speaker 4: In early November , we announced an exclusive three-year agreement for our pain management solution with a leading West Coast health care provider.
Their provider and later in November we were down selected by a leading global medical technology and diagnosis diagnostic equipment company to provide biomedical services to 800 hospital systems in the U S and Canada.
Speaker 4: And later in November , we were down selected by a leading global medical technology and diagnosed equipment company to provide biomedical services to 800 hospital systems in the US and Canada.
It would be difficult to overstate how material the emerging opportunity in acute care hospitals is for MP system. Our business has historically been almost exclusively related to the home health care sector and that is where we've spent the last several decades developing a number of skills that are increasingly providing NP system with competitive advantages in a rapidly evolving market.
Speaker 4: It would be difficult to overstate how material the emerging opportunity in acute care hospitals is for InfuSystem. Our business has historically been almost exclusively related to the home health care sector and that is where we've spent the last several decades developing a number of skills that are increasingly providing InfuSystem with competitive advantages in a rapidly involving marketplace.
Please.
As a company we are now big enough that our skills and in particular, our high service levels have started to be noticed outside of the home health care market.
Speaker 4: As a company, we are now big enough that our skills, and in particular, our high service levels have started to be noticed outside of the home healthcare market.
Speaker 4: Of course, this is no accident. Our acquisitions in the first half of 2021 of two BioMed companies were specifically designed to increase our capabilities in our profile and acute care. Almost immediately after integrating these two companies, we began to uncover opportunities to scale our legacy skill sets and our new capabilities into our opportunities far larger than the business we'd acquired.
Of course, this is no accident or acquisitions in the first half of 2021 of two biomed companies were specifically designed to increase our capabilities and our profile in acute care.
Almost immediately after integrating these two companies we began to uncover opportunities to scale, our legacy skill sets and our new capabilities into our opportunities far larger than the business we acquired.
Speaker 4: Take for example, the opportunity we disclose in November . We expect 8 to 12 million dollars in new business during the first 12 months with the potential of the work scaling up to 14 to 15 million dollars per year. This is obviously very material for a company of our current size. And the revenue ramps very quickly.
Take for example, the opportunity we disclosed in November we expect $8 million to $12 million in new business. During the first 12 months with the potential of the work scaling up to $14 million to $15 million per year.
This is obviously very material for a company of our current size and the revenue ramps very quickly.
This is different than the slower burn we see in our Ips business segment, where the opportunity may be just as big but the revenue ramp comes more slowly typically at least six to nine months.
Speaker 4: This is different than the slower burn we see in our ITS business segment, where the opportunity may be just as big, but the revenue ramp comes more slowly, typically at least 6-9 months.
Because of the materiality of the pending contract. We believe we had to disclose it in November and then we have to update investors today. We are at the ready to formally signed this agreement begin the work not just because of the significant contributions of this contract and what it will have to our top and bottom lines, but also because of the further opportunities. We believe this contract will create.
Speaker 4: Because of the materiality of the pending contract, we believe we had to disclose it in November and that we have to update investors today. We are at the ready to formally sign this agreement and begin the work, not just because of the significant contributions of this contract and what it will have to our top and bottom lines, but also because of the further opportunities we believe this contract will create. Our team and our services will gain exposure within 800 hospital systems in the US and Canada.
Our team and our services will gain exposure within 800 hospital systems in the U S and Canada.
Speaker 4: I've talked about cross selling opportunities before. Well those opportunities are going to be a lot more significant as soon as our partner is ready and we get to work in all those facilities.
I've talked about cross selling opportunities before while those opportunities are going to be a lot more significant as soon as our partner is ready and we get to work and all of those facilities.
Speaker 4: InfiSystems unique skill sets relate to managing mobile devices used in healthcare. To support our existing operations, we manage a fleet of more than 110,000 medical devices. As we move into the acute care hospital environment, we are going to be exposed to millions of devices with this creating constant opportunities to leverage the skills we have developed over the last 30 years.
<unk> systems unique skill sets relate to managing mobile devices used in healthcare to support our existing operations, we manage a fleet of more than 110000 medical devices as we move into the acute care hospital environment, we're going to be exposed to millions of devices with this creating constant opportunities to leverage the skills. We have developed over the last 30 years, we have.
Speaker 4: We will see large new opportunities to rent equipment, buy and sell equipment, provide annual maintenance, repairs and upgrades to equipment, and provide consumable
See large new opportunities to rent equipment buy and sell equipment provide annual maintenance repairs and upgrades to equipment and provide consumables.
Alright.
Speaker 4: I should take a moment and emphasize that this is not a change in our business. This is a new opportunity relating to our second business unit, our DME services business. The services are listed above including rental, sales, and equipment services.
I should take a moment and emphasize that this is not a change in our business. This is a new opportunity relating to our second business unit, our <unk> services business. The services are listed above including rental sales and equipment services are things that our <unk> business has always done but almost entirely entirely to just the home health care market now we can target home health.
Speaker 4: are things that our DME business has always done, but almost entirely to just the home health care market. Now we can target home health and acute care, and acute care has many more devices and a much larger total addressable market.
And acute care and acute care as many more devices in a much larger total addressable market for us.
Speaker 4: Going forward, we believe that our DME business segment will have growth potential on par with our ITS business.
Going forward, we believe that our <unk> business segment will have growth potential on par with our Ips business segment, and there's one more thing new business and <unk> often has a defined value.
Speaker 4: And there's one more thing, new business and DME often has a defined value. By that, I mean that we agree at the onset to rent a certain number of pumps for a defined period and a defined price, or that we agree to provide Biomed services with an agreed fee per device for labor and parts. This means when we sign a new contract to provide DME services, we will know before the contract is even signed how much revenue we can expect from the new relationship.
By that I mean that we agree at the onset to rent a certain number of pumps for a defined period and a defined price or that we agreed to provide biomed services with an agreed fee per device for labor and parts.
This means when we sign a new contract to provide <unk> services, we will know before the contract is even signed how much revenue we can expect from the new relationship.
Speaker 4: This also means that the timing of a material new contract will have the potential to affect our results for a particular quarter. At InfiSystem, our culture has and will continue to manage the business for the long-term creation of value. We will resist the urge to manage our results by pulling business forward. We will manage the potential of periodic lumpiness in our business by disclosing, to the extent we can, the status and timing of large new contracts.
This also means that the timing of a material new contract, we will have the potential to affect our results for a particular quarter.
An empty system, our culture has and will continue to be to manage the business for the long term creation of value. We will resist the urge to manage our results by pulling business forward, we will manage the potential of periodic lumpiness in our business by disclosing to the extent, we can the status and timing of large new contracts.
Speaker 4: We thought the 800 hospital contract would be signed before year end. The delays are not completely related to COVID although I'm sure that has contributed.
We thought the 800 hospital contract will be signed before year end. The delays are not completely related to COVID-19 , although I'm sure that has contributed.
Speaker 4: We believe the delays are the result of working on a complex agreement with a very large and complex organization. This is a very big deal for us, but a very small deal for us.
We believe the delays as a result of working on a complex agreement with a very large and complex organization. This is a very big deal for us.
But a very small deal for them.
Speaker 4: Although it hasn't worked on our timeframe, it certainly will be worth the wait. We are ready and anxious to start and plan to provide updates and disclosures as we make progress.
Although it hasnt worked on our timeframe. It certainly will be worth the wait we're ready and anxious to start and plan to provide updates and disclosures as we make progress.
Speaker 4: And I should note the big contract is not the only opportunity we are pursuing in Biomed services and DME.
And I should note the big contract is not the only opportunity we are pursuing and biomed services and DMA.
We are currently doing work related to three agreements recently signed with GE healthcare.
Speaker 4: We are currently doing work related to three agreements recently signed with GE Healthcare.
Speaker 4: We expect approximately $3 million in annual revenue under these contracts, and the work includes device maintenance, inventory management, and repair services for some of their hospitals.
We expect we expect approximately $3 million in annual revenue under these contracts and the work includes device maintenance inventory management and repair services for some of their hospitals.
Speaker 4: As we continue to grow our capabilities, we continue to see rising demand for our expertise and high levels of service from some of the largest healthcare companies in the world.
As we continue to grow our capabilities, we continue to see rising demand for our expertise and high levels of service from some of the largest health care companies in the world.
Speaker 4: Our motto is safe, smart and trusted, and we are increasingly seen as a company with the skills to solve problems and facilitate quality care, whether that involves our ITS turnkey solutions or our DME suite of products and services.
Our motto of safe Smart and trusted and we are increasingly seen as a company with the skills to solve problems and facilitate quality care, whether that involves our Ics turnkey solutions for our <unk> suite of products and services.
Speaker 4: Before opening the line to questions, I think it's important to emphasize that while I've spent significant time this morning talking about material developments in our DME business, none of it is intended to take away from our continued opportunities in the ITS business sector.
Before opening the line to questions I think it's important to emphasize that while I've spent significant time. This morning talking about material developments in our Dms business. None of it is intended to take away from our continued opportunities in the Ats business segment <unk>.
Speaker 4: Omicron stole some of our momentum last year, but we see 22 as being a very good year for ITS, with pain management expected to take the lead in delivering solid top-line growth. This is in part due to the three-year exclusive agreement with a large west closed healthcare provider.
<unk> sold some of our momentum last year, but we see 'twenty two as being a very good year for Etfs with pain management expected to take the lead in delivering solid topline growth.
This is in part due to the three year exclusive agreement with a large west coast health care provider.
Speaker 4: For the year, we currently believe ITS will match the strong growth forecast in our DME segment. Together, our two business units are currently expected to drive an aggregate of 20% top-line growth in 2022, with equal top-line contributions coming from the ITS and DME segments.
For the year. We currently believe Ips will match the strong growth forecast in our Dms segment together. Our two business units are currently expected to drive an aggregate of 20% top line growth in 'twenty, two with equal topline contributions coming from the Ats and <unk> segments paint.
Speaker 4: Pain management is expected to be the largest contributor to growth in ITS, and the large new biomedical contract is expected to contribute a lot of the growth in DME.
Pain management is expected to be the largest contributor to growth in Ics and the large new biomedical contract is expected to contribute a lot of the growth in <unk>.
This aggregate outlook is of course contingent on the execution and timing of the large biomed contract and a return to somewhat normal operations in the health care sector post <unk>.
Speaker 4: This aggregate outlook is, of course, contingent on the execution and timing of the large biomed contract and the return to somewhat normal operations in the healthcare sector post-Omocron.
Speaker 4: Once we have the necessary visibility on these matters, we'll host an investor call to share guidance for the remainder of the fiscal year. And give an update on our progress.
Once we have the necessary visibility on these matters, we will host an investor call to share guidance for the remainder of the fiscal year and give an update on our progress we're working hard not only to regain our momentum momentum in 'twenty, two but to grow and extend the potential of our two business platforms. We.
Speaker 4: We are working hard not only to regain our momentum in 2022, but to grow and extend the potential of our two business to the cloud.
Speaker 4: We are well-positioned to successfully drive operational performance and create shareholder value. And now we're happy to answer any questions.
We are well positioned to successfully drive operational performance and create shareholder value.
And now we're happy to answer any questions.
Speaker 2: We will now begin the question and answer session. If you'd like to ask a question, press star, then one to join the question queue. If you are using a speakerphone, please pick up your handset before pressing the keys.
We will now begin the question and answer session.
Wanted to ask a question press Star then the one to join the question queue.
If you are using a speakerphone please pick up your handset before pressing the keys.
Speaker 2: If you'd like to withdraw yourself from the question queue, press star, then 2. You will pause momentarily to assemble our roster.
I would like to withdraw yourself from the question queue Press Star then two.
Pause momentarily to assemble our roster.
And the first question comes from Alex Nowak with Craig Hallum. Please go ahead.
Speaker 2: And the first question comes from Alex Novak with Craig Hallam. Please go ahead.
Great. Good morning, everyone, having listened to a variety of health care earnings calls so far this earning season I think we all get the COVID-19 impacts that we're seeing in Q4, but I think the biggest question here is just the size of Alcon. What has changed from November Q3 earnings call through the end of this quarter you made it seem like <unk> was the big piece of it.
Speaker 2: Great. Good morning, everyone. You know, I haven't listened to a variety of health care earnings calls so far this earnings season. I think we all get the COVID impact that we're seeing in Q4. But I think the biggest question here is just besides Omicron, what has changed from November's Q3 earnings call through the end of this quarter? You made it seem like Omicron was the big piece of it, but you said it's not only Omicron. So I'm curious, what else changed?
But you said it not only on the cloud so I'm curious what else changed.
Yes, so <unk> is definitely the biggest piece of it right that slowdown elective surgeries, which impacted our pain management business and it definitely impacted our wound care business.
Speaker 4: Yeah, so Omicron is definitely the biggest piece of it, right? That slowed down elective surgeries, which impacted our pain management business. And it definitely impacted our wound care business in a little bit different way in that
And a little bit different way than that.
Speaker 4: You know, when nurses are kind of struggling and there's seven instead of twenty nurses in a facility, they're just not making decisions and executing on agreements and bringing in new devices.
When nurses are kind of struggling and there are seven instead of 'twenty nurses in a facility. They are just not making decisions and executing an agreement to bringing in new devices and that was a big deal for us because we were relying quite a bit on some some big.
Speaker 4: And that was a big deal for us because we were relying quite a bit on some big wound care device leases that we expected to come in in December .
<unk> care device leases that we expect it to come in in December .
Speaker 4: Part of the slippage was because of Omicron, people out, not available to sign. And part of it is just the timing thing, right? It just didn't happen to fit with our quarterly target. But we expect those to come in very shortly, actually here in the first quarter of this year. So it's just something that got pushed to the right a little bit.
Part of the slippage was because of <unk> people out not available to sign.
And part of it is just the timing thing right. It just didn't happen to fit with our quarterly target, but we expect those to come in very shortly actually here in the first quarter of this year. So it's just something that got pushed to the right a little bit.
Speaker 4: So, a big part of it is definitely Omicron and some of it's just timing of working with big facilities and big leases and big deals similar to the contract, the big biomarkers.
So a big part of it is definitely omicron and some of it's just timing of working with big facilities and big leases in big deals similar to the to the contract the big Biomed contract.
Speaker 4: It was kind of out of our control, but it's still a deal we're working on and we expect to get. But Omicron is definitely a big piece of it, especially in pain and wounds.
It was kind of out of our control, but it's still a deal we're working on and we expect to get but <unk> is definitely a big piece of it especially in pain in wound care.
Okay understood and actually on that big DMA biomedical deal.
Speaker 2: OK, understood. And actually on that big DME biomedical deal.
I mean, I think last quarter I think we all thought that the deal was pretty much done.
Speaker 2: I mean, I think last quarter, I think we all thought that the deal was pretty much done. It I guess I'm trying to figure out why it seems that that agreement is a little bit further off than originally expected in November . Was this pushback from the big backup device company that ultimately led to delays? Do you combine that with with COVID-19 and that's why it's being pushed out a little bit and then when you take that 20% growth guidance is that deal included in that number or what is included there?
I guess I'm trying to figure out why it seems that that agreement is a little bit further off than originally expected in November was pushed back to the big tobacco device company that ultimately led to delays do you combine that with Covid and Thats why its.
They are being pushed out a little bit and then when you take that 20% growth guidance is that deal included in that number or what is included there.
Speaker 4: So that is, let me go kind of in reverse. So it is included in the number. If for some reason it fell apart, we have the team in place to go out and work on other agreements we can bring in. So it's not the only agreement we're working on. To answer your question about, you know, why did it slip and why is it pushed out that far? Nothing has really changed. All the terms and conditions are agreed to. It's literally just a matter of getting their legal teams time and focus.
So that is let me go kind of in reverse so it is included in the number.
If for some reason it fall apart we.
The team in place to go out and work on other agreements we can bring in so it's not the only agreement we're working on.
To answer your question about why did it slip and why is it pushed out that far nothing has really changed all the terms and conditions are agreed to it's literally just a matter of getting their legal teams time and focus.
Speaker 4: I think when you guys see the name, you'll know why it's taking so long. So part of it, we're in the holidays, part of it is COVID and part of it is just dealing with a big company. As a result of that, our market is being Savannah vocabulary and the as a group on the against the psychiatric side of things, not just the people who are negative to you, but our our.
I think when you guys see the name you'll know why it's taking so long so part of it we ran into the holidays part of it is COVID-19 and part of it is just dealing with a big company.
But R R.
Speaker 4: Confidence in getting it hasn't wavered at all since November . So we're still in the same position. It's just taking longer than kind of we would hope. It's just not on our time.
Confidence in getting it hasn't wavered at all since November so we're still in the same position is just taking longer than kind of we would hope its just not on our timeframe.
Speaker 2: Yep, understood. And then what did the pain and the wound business run rate end at the end of 2021? The original target, I think, was 12 to 15 million. So when do you expect to get to that number during 2022? Yeah, I think it was close.
Yes, understood and then what did the pain in the wound business for run rate and at the end of 2021.
Original target I think it was $12 million to $15 million of when do you expect to get to that number during the 2022.
Yes, I think it was closer to $6 million for an annual basis.
Yes, and a lot of a lot of what was in that run rate was those leases.
Speaker 4: Yeah, and a lot of what was in that run rate was those leases. So, to answer the 2nd, part of that question, Alex, I think.
So to answer the second part of that question, Alex I think.
Speaker 4: I don't know if I want to put a date on when we're going to be at that run rate, but it'll be pretty soon. It'll really be contingent on, for pain at least, for the kind of post-Omicron surge we expect to see. Patients still have torn rotator cuffs and torn ACLs and they need their surgery, so we expect those cases to show up.
I don't know if I want to put a date on when we're going to be at that run rate, but it will be pretty soon it will really be contingent on for pain at least for the kind of post <unk>, we expect to see pay.
Patients still have torn rotator cuffs, and <unk> and they need their surgery. So we expect those cases to show up it's just when do people feel confident to come back in the hospital and when does the hospital turned those surgeries back on that's a huge piece of it on the wound care side a lot of it is tied to the leasing strategy, we have to get into the in patient side of the business not just the home page.
Speaker 4: It's just when do people feel confident to come back in the hospital and when does the hospital turn those surgeries back on? That's a huge piece of it. On the wound care side, a lot of it is tied to the leasing strategy we have to get into the inpatient side of the business, not just outpatient. You kind of need both sides to be successful.
<unk>, you kind of need both sides to be successful and some of those contracts are well over $1 billion. So as those hit we will start to see the run rate really really pick up.
Speaker 4: And some of those contracts are well over a million dollars. So as those hit, we'll start to see the run rate really, really pick up. But most of the growth in ITS this year is combined between pain and wound care with pain driving most of it.
But most of the growth in Ics. This year is combined between pain and wound care with pain driving most of it so that run rate should pick up pretty significantly probably fairly quickly. It's just hard to tell with all Mcgrath.
Speaker 4: So that run rate should pick up pretty significantly, probably fairly quickly. It's just hard to tell with almost
Okay got it and then just last question from me this one's a housekeeping clarification. The press release said that the results are preliminary but it looks like these are full financial statements.
Speaker 2: Okay, got it. And then just last question for me, this one's a housekeeping clarification item. The press release says the results are preliminary, but it looks like these are full financial statements. So I just want to clarify, are these financial statements subject to change or just clarify what is preliminary here?
I just wanted to clarify are these financial statements subject to change or just clarify what is preliminary here.
Speaker 5: Yeah, we're not fully complete with our audit, so that's just the main thing. I would not expect them to change, but we're only about halfway through, so we don't typically have audit adjustments, but we expect to file sometime in the first half of March.
Yes, we're not fully complete with our audit, but thats not the main thing.
I would not expect them to change but.
We're only about halfway through so we don't typically have an adjustments but.
So we expect to file sometime in the first half of March.
I just wanted to get the results out or at least the commentary out there now.
Speaker 2: I see, but you want to get the results out or at least the commentary out there now.
Speaker 6: That's correct. Yeah, as soon as we got it.
That's correct.
As soon as soon as we got it.
Soon as we felt we had solid numbers.
Speaker 4: Soon as we felt we had solid numbers, we had the call. So they'll be finalized in the next few weeks.
We had the call so there'll be finalize the next few weeks.
Okay sounds good. Thank you I appreciate it.
Thanks, Alex.
The next question comes from Brooks O'neil with Lake Street Capital markets. Please go ahead.
Speaker 2: The next question comes from Brooks O'Neill with Lake Street Capital Markets. Please go ahead.
Speaker 7: Thank you. Good morning, guys. Appreciate all the color and the answers to Alex's questions. I'm just curious, you mentioned, I think, in the preliminary remarks that you also saw a bit of a slowdown in the cancer business. I was kind of surprised by that.
Thank you good morning, guys.
Appreciate all the color and the answers to Alex's questions. I'm. Just curious you mentioned I think in the press.
Preliminary remarks that.
You also saw a bit of a slowdown in the cancer business.
I was kind of surprised by that.
Speaker 7: kind of view cancer as one of those things that doesn't stop for much. So can you just give us some color on what you're seeing in kind of that big business? Sure. Good morning, Brooks. Thank you for having me.
I kind of view cancer is one of those things it doesn't stop for much. So can you just give us some color on what you're seeing in kind of that big business.
Sure. Good morning, Brooks, that's a great question so.
Speaker 4: The slowdown there is because people aren't going in and getting preventative care. So there's just less colonoscopies happening. It's kind of like what we're seeing with heart disease and other types of things in healthcare. People just aren't going to get their checkup.
The slowdown there is because people aren't going in and getting preventative care. So there's just less colonoscopy is happening it's kind of like what we're seeing with heart disease and other other types of things in healthcare people just aren't going to get their checkups. So you see less new patients because theres less diagnosis right.
Speaker 4: So you see less new patients because there's less diagnoses, right? There's nothing fundamentally wrong with the business at all. We saw this at the end of 20 a little bit, with kind of that second surge. And then early in 21, we saw them all come back. All those patients end up showing up once they go get their colonoscopies and reschedule it.
Nothing fundamentally wrong with the business at all.
We saw this at the end of ninth or the end of 'twenty, a little bit with kind of that second surge and then early in 'twenty. One we saw them all come back all those patients end up showing up once they go get a colonoscopy and reschedule it.
Speaker 4: The good news is in that business, you'll see an announcement, I think it's two weeks from today, we signed up one of the biggest private practices in oncology and we also just signed one of the biggest, I think one of the top three cancer centers in the country as well. So the oncology business is as strong as ever. It's just we can't control the patients and their colonoscopies and diagnosis. But that will happen. It's just, it's a timing issue. Again, as Omicron kind of loosens its grip, we should see those new patients start.
The good news is in that business, you'll see an announcement I think it's two weeks from today, we signed up one of the biggest private practices in oncology and we also just signed one of the biggest I think one of the top three cancer centers in the country as well so the oncology business is as strong as ever. It's just we can't control the patients and their colonoscopy diagnosis, but that will happen.
It's a timing issue again as AUM across kind of loosens. Its grip, we should see those new patients start to come back in.
Speaker 5: I just want to add, we actually grew in oncology quarter four versus quarter four, it just wouldn't work.
Yes, I just wanted to add more with <unk>.
Sure Barry.
We actually grew.
In oncology, our quarter four versus quarter four it just wasn't where our expectations were.
Okay. That's good I'm always torn in the healthcare business, whether I should group for more patients to get serious diseases or whether I should be at that.
Speaker 7: Okay, that's good. I'm always torn in the healthcare business whether I should root for more patients to get serious diseases or whether I should be happy that
I don't think this is a slowdown but at least you're not seeing it in your business right. This second.
Speaker 7: I don't think this is a slowdown, but at least you're not seeing it in your business right this second. I don't see a large drop in coverage of this presentation, but does anyone have anything
Speaker 7: On the DME side, would you say any of the delays will create pent up demand here in 2022? Or would you say the delay?
On the <unk> side would you would you say any of them.
Delays will create pent up demand here in 2022 or would you say.
The delay simply.
Speaker 7: results in lost business that we don't get in in 2021 or 2022. You're talking about on the biomed side?
Results in loss of business that we don't get it in 2021 or 2022.
Talking about on the biomet side.
On the surface, yes, yes, so I would say its pent up demand.
Speaker 4: Yeah, so I would say it's pent up demand. If a pump needs to be maintained this year, it has to be maintained this year, right? Based on FDA guidelines and manufacturer recommendations.
If a pump and easily maintain maintain this year. It has to be maintained this year based on FDA guidelines of the <unk> nation.
Nations.
Speaker 4: it just means we're going to have to work a little quicker to kind of catch up as these facilities need their devices repaired and maintained. If a device is broken, it's still broken. We still have to repair it. If it has to be maintained, it still has to be maintained. If we have to take inventory, we still have to do that.
This means we're going have to work a little quicker to kind of catch up as these facilities neither devices repair to maintain so if a device is broken it's still broken we still have to repair if as we maintain a philosophy maintain if we have to take inventory, we still have to do that.
Speaker 4: So, I wouldn't say it's gone forever. I think the timing of the contract does impact things, right? We can only catch up so much, you know, per day. Sure.
So I wouldn't say, it's gone forever I think the timing of the contract does impact things right. We can only catch up so much per day sure.
But.
I think we're fine I think we're still in that $8 million to $12 million in the first 12 months and the hope is we get.
Speaker 4: I' to welvemonth.
Speaker 4: And the hope is we get as much of that as possible this year.
As much of that is possible this year.
Speaker 7: Just a time thing. That's great. And then I think you mentioned the potential for some other contracts out there. And would you say your pacing there is related to your ability to scale that DME services business? Or is it more sort of the same kind of phenomenon that you're seeing with the current big contract that's pen.
That's great.
And then I think you've mentioned the potential for some other contracts out there.
Would you say your pacing there is related to your ability to scale that dnb services business or is it more sort of the same kind of phenomenon that you're seeing with the <unk>.
Correct.
Greg Thats pending.
Speaker 4: It's a little bit of both. So I mentioned the three GE contracts. So our guys are out working with good, right? Great relationship with a phenomenal huge company There are other contracts to get part of it is, you know, when the big one comes in It's going to take a lot of resources, right? The good news is we're ready, right? We have the guys ready to go and the day that contract we put pen on paper They're going to be booking flights and flying all over the US to repair devices. That's the good news
It's a little bit of both so I mentioned the <unk> contract. So our guys are out working with good right great relationship with a phenomenal huge company.
There are other contracts to get part of it is when the big one comes in it's going to take a lot of resources right. The good news is we're already right. We have the guys ready to go and the data contract, we put pen on paper, they're going to be booking flights and flying all over the U S to repair devices. That's a good news so we're a little cautious or bringing on anything significant before that comes in.
Speaker 4: So we're a little cautious of bringing on anything significant before that comes in. But there's some big contracts out there that we're looking to sign. They're not all $15 million.
But there'll be there's some big contracts out there that we're looking to sign.
They're not all $15 million a year, but theres some theres some big numbers out. There. This is this is $115 million contract. There's a lot to be had out there I mentioned earlier in the call that there's millions of devices in the acute care setting.
Speaker 4: But there's some there's some big numbers out there. This is you know, this is one 15 million dollar contract There's a lot to be had out there. I mentioned earlier in the call that you know, there's millions of devices in the acute care setting
Speaker 4: And with the crunch that hospitals are feeling financially, they're not going to necessarily go out and replace them and spend the capital. They want to repair them and maintain what they have. So the opportunity is growing.
And with the French that hospitals are feeling financially, they're not going to necessarily go out and replace them and spend the capital they want to repair them and maintain what they have so the opportunity to just growing for us which is nice so so dnb the biomed side, yes, one contracts that would be fantastic, but that's just a piece of the puzzle here, it's going to be much bigger than that.
Speaker 4: which is nice. So, DME, the BioMed side, yeah, one contract is going to be fantastic, but that's just a piece of the puzzle here. It's going to be much bigger than the other.
Speaker 7: Great. And then let me ask you one more question. Obviously, the delays are impacting your growth, really on both sides of the business. But, you know, the platform you have an ITS, we've always sort of thought there might be more, more devices, more categories that you can target. Would you say the current environment is such that you're going to be perhaps
Great and then let me ask you one more question.
Obviously, the delays are impacting your growth.
Really on both sides of the business, but due to the.
The platform you have been.
Yes, we've always sort of thought that might be more more devices more categories that you can target would you say.
Current environment is such that youre going to be perhaps more cautious in adding another leg to that stool in 2022 or do you think youll continue to push.
Speaker 7: more cautious in adding another leg to that IPS stool in 2022? Or do you think you'll continue to push the envelope and expand that platform?
Below and expand that platform.
For the future.
Speaker 4: Yeah, so I don't think we're going to turn a blind eye to new therapies, but at the same time, I think our mantra this year is going to be to focus and execute on what we have in front of us. Right? So between Biomed services, wound care and pain. You know, those are 3 huge opportunities for us that are ready to go. I think I think the the.
Yes, so I don't think were going to turn a blind eye to new therapies, but at the same time I think our mantra. This year is going to be to focus and execute on what we have in front of US right. So between biomed services wound care and pain. Those are three huge opportunities for us that are ready to go.
I think the.
Speaker 4: the focus for this team and this company this year is to go execute on those three. Now if something really nice comes up and it's the right time, the right product, the right partner, all that stuff, then great. Right? We'll think about it. But right now we have three tremendous growth opportunities like right in our hands, right? Within our reach. So that's where we're going to focus in 2022 and as things progress we'll see what happens.
The focus for this team and this company. This year is to go execute on those three now if something really nice comes up and its the right time, the right product the right partner all of that stuff in great great well, we'll think about it.
But right now we have three tremendous growth opportunities right in our hands right within our reach so that's where we're going to focus in 2022 and as things progress, we'll see what happens.
Great.
Speaker 7: Great, and I don't mean to belabor this, but lymphedema you're still working on, you're still enthusiastic about, just might not be a big contributor in 2022?
Don't mean to belabor this but lymphedema youre still youre still working on Theres still enthusiastic about it just might not be a big contributor in 2022.
Yes, I think Thats fair, we're still working behind the scenes to kind of perfect the model and iron out some of the some of the kind of go to market strategies.
Speaker 4: Yeah, I think that's fair. We're still working behind the scenes to kind of perfect the model and iron out some of the kind of go to market strategies. So that's still all.
So that's still all in the works its just not where we're going to focus the teams efforts. We are doing that kind of behind the scenes. That's really a 'twenty three 'twenty four thing it's about 22.
Speaker 4: It's just not where we're going to focus the team's efforts. We're doing that kind of behind the scenes. That's really a 23, 24 thing. It's not 22. I think, I think the three, the three we're working on today all have, could all trans be transformative for the company. Um, I think we're going to execute in all three. And if we do, that's where we start to, you know, double the revenue of the business. So, um, we have some great opportunities in front of us. Lymphedema is in that, on that list. It's just staged differently than the rest.
I think the three the three we're working on today all have put all tranches to be transformative for the company.
I think we're going to execute on all three and if we do that is when we start to double the revenue of the business. So.
We have some great opportunities in front of US lymphedema is in that on that list. It's just stage differently from the rest of them.
Yes. Thank you very much I appreciate all the color.
Speaker 7: Yep, thank you very much. I appreciate all the color. Thanks Brooks.
Thanks Brooks.
Okay.
And our next question comes from Jim Sidoti with Sidoti <unk> Company. Please go ahead.
Speaker 5: And our next question comes from Jim Sidoki with Sidoki & Company. Please go ahead. Good morning, thanks.
Good morning, Thanks for taking the questions.
Can you just quickly you said you have three big opportunities I know one of these big contracts on the server side what would the other two.
Speaker 8: Can you just quickly, you said you have three big opportunities. I know one is this big contract on the service side. What were the other two?
So the other two were just the growth in pain and the growth in wound care. So.
Speaker 4: So the other two are just the growth in pain and the growth in wound care. Wound care is ready to go. It's just a matter of getting the healthcare world to...
Home care is ready to go it's just a matter of getting the healthcare world.
To.
Speaker 4: be properly staffed so they can start to make decisions and bring in new products. And on the pain side, they're ready to go. As soon as elective surgeries kind of come back fully online, we've added a bunch of markets here in the last six months. And as soon as the patients come back in, it's going to really, really accelerate in the next few months. So between pain, wound care and biomed, all of those can be transformative if they hit.
Be properly staff, so they can start to make decisions and bringing new products and on the pain side, they're ready to go as soon as elective surgeries come back fully online we've added a bunch of market share in the last six months and soon as soon as the patients come back in.
Really really accelerate in the next few months so between pain wound care in biomed.
All of those can be transformative if they hit.
Speaker 8: And how many sales folks have you added for the pain and wound care business in 2021?
And how many sales folks have you added.
Pain in wound care business in 2021.
Speaker 4: So in pain, we went from 3 to 8. So we added 5 and in wound care, we went from 3 to 15 or 16. I forget the exact number. So effectively we doubled the sales team of almost the entire company. Even including, well, we didn't add it in oncology, but if you add the totals up, it almost doubles.
So in pain.
We went from three to eight so we added five and in wound care. We went we went from three to 15 or 16 I forget the exact number.
So effectively we doubled the sales team of almost the entire company, even including well not we didn't added in oncology, but if you add the totals up almost double.
Speaker 8: Okay. All right. And then, you know, one of the things about Omicron is it ramped up very quickly, but it also seems to be ramping down fairly quickly. You know, I know it's very early in February , but are you seeing any indications that things are improving?
Okay, Alright, and then.
One of the things about Almond Crown has that ramped up very quickly, but it also seems to be ramping down.
Fairly quickly.
I know, it's very early in February but are you seeing any indications that things are improving.
Speaker 4: So I agree with you, at least the perception is it's ramping down, right? I mean, I think we all kind of feel that difference where in December and January we all knew a bunch of people that were sick, and now it seems to be kind of, you know, phasing out a little bit.
So I agree with you at least the perception is it's ramping down right. I mean, I think we all kind of feel that difference where in December and January we all knew a bunch of people that were sick and now it seems to be kind of phase.
Phasing out a little bit I think the fact is in the hospital environment at least in January they still felt it.
Speaker 4: I think the fact is in the hospital environment, at least in January , they still felt it. For them, it's more reality than our perception, right? So I think the healthcare market is going to take a little longer to recover, but we definitely are starting to see signs of it.
For them, it's more reality than our perception right. So I think the healthcare markets can take a little longer to recover but we definitely are starting to see signs of it.
Speaker 4: We just don't know how fast it will be. So my hope is, you know, we still felt the pain in January for sure.
Don how fast it'll be so my hope is we still felt the pain in January for sure, but as we're into February here, we can happen starting to feel a little better to us and Thats. The hope as we move through this month and into March so.
Speaker 4: But as we're into February here, you know, a week and a half in, it's starting to feel a little better to us, and that's the hope as we move through this month and into March. So.
Speaker 4: You know, no one can predict Omicron, but the expectation is over the next few weeks we should start to see the Omicron impact really lessen for.
It's no one can predict omicron, but the expectation is over the next few weeks, we should start to see the omicron impact really really lesson for us.
Speaker 8: And then the last question, you know, you didn't provide formal guidance, but you kind of gave an outlook including the contract, but why not give us guidance without this contract and then you could always take it up later on when you get it?
And then the last question.
You didn't provide formal guidance, but would you kind of gave an outlook, including the contract.
Why not give us.
Guidance without this contract and when we could always take it up later on when you get it.
Speaker 4: You know, we could, I just don't, I don't want to bounce the number around too much and I feel like it's close enough time wise. That it's worth the wait.
We could I, just don't I don't want to bounce a number around too much and I feel like it's close enough time wise, but it's worth the wait.
We're confident in 20% growth with the contract even if we didnt get it I would I still think we'll be in the mid to high teens, because there's enough opportunities out there.
Speaker 4: You know, we're confident in 20% growth with the contract and even if we didn't get it. I would, I still think we'll be in the mid to high teams because there's enough opportunities out there. We just have to wait till this contract comes in and it's not even the, well, the contract coming in is important, but it's the timing of it. This isn't as important as anything, right? It's. At $15 million a year and a run rate, it's about $1 million a month.
Just have to wait till this contract comes in and it's not even while the contract coming in is important but it's the timing of it.
As important as anything right at $15 million a year on a run rate, it's about $1 million a month.
Speaker 4: So, the faster we get it, obviously, the more it's going to contribute. But we want to be conservative and cautious and make sure we have as good of a number for you guys as possible. And we'll give you top and bottom line numbers as soon as we can.
So the faster we get at obviously, the more its going to contribute.
But we want to be we want to be conservative and cautious to make sure. We have as good of a number for you guys as possible and we will give you a top and bottom line numbers as soon as we can.
And you think you'll get these contracts in the first half of 2022 is that the expectation.
Speaker 8: And you think you'll get this contract in the first half of 2022? Is that the expectation? Absolutely. rectifying it?
Absolutely.
Okay alright, thank you.
Sure.
This concludes our question and answer session I'll turn the conference back over to Joe Joe Dorman for any closing remarks.
Speaker 5: This concludes our question and answer session. I'll turn the conference back over to Jay Dorme for any closing remarks.
I'm, sorry, rich diiorio for any closing remarks, thanks, Tom I want to thank everyone for participating in today's call I Hope everyone has a good day and I look forward to talking with you again, when we host our 2022 full year guidance call. Please stay safe and thank you.
Speaker 4: I'm sorry, Rich Diorio for any closing remarks. Thanks, Tom. I want to thank everyone for participating in today's call. I hope everyone has a good day and I look forward to talking with you again when we host our 2022 full year guidance call. Please stay safe and thank you.
Speaker 5: The conference is now concluded. Thank you for attending today's presentation. You may now disconnect.
The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
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