Q4 2021 Harrow Health Inc Earnings Call
Yeah.
Good afternoon, and welcome to Harrow Health's fourth quarter 2021 earnings Conference call. My name is Tom and I will be your operator for today's call. At this time all participants are in a listen only mode. Later, we'd be conducted we will conduct a question and answer session and instructions will be given at that time as a reminder, this conference is.
Being recorded.
I would now like to turn the conference over to Jenny Wang Director of Communications and Investor Relations for Harrow Health.
Thank you operator.
Good afternoon, and welcome to Harrow Health's fourth quarter and Erie in 2021 earnings Conference call before we begin today, let me remind you that the company's remarks may include forward looking statements within the meaning of federal Securities law.
We're looking statements are subject to numerous risks and uncertainties many of which are beyond Harrow health's control, including risks and uncertainties described from time to time in its SEC filings such as the risks and uncertainties related to the company's ability to make commercially available its FDA approved products and compounded formulations and.
And FDA approval of certain drug candidates in a timely manner or at all.
For a list and description of those risks and uncertainties. Please see the risk factors section of the company's most recent annual report on Form 10-K , and subsequent quarterly reports on Form 10-Q filed with the Securities and Exchange Commission.
<unk> results may differ materially from those projected Harrow disclaims any intention or obligation to update or revise any financial projections or forward looking statements, whether because of new information future events or otherwise.
This conference call contains time sensitive information and is accurate only as of today.
Additionally, Harold will refer to non-GAAP financial metrics, specifically adjusted EBITDA and our adjusted earnings.
A reconciliation of any non-GAAP measures with the most directly comparable GAAP measures is included in the company's letter to stockholders are available on the website.
By now you Should've received a copy of the earnings press release.
You have not received a copy please go to the Investor Relations page of the company's website Www Dot Harold H Dot com.
Joining me on today's call are Harrell's, Chief Executive Officer, Mark L Baum, and <unk>, Chief Financial Officer, Andrew Boll.
Then I'd like to turn the call over to Mark to go over some prepared remarks prior to the question and answer session or.
Good afternoon, and thanks for joining us on today's call.
I would encourage you to review our fourth quarter and year end 2021 earnings release corporate presentation and letter to stockholders all of which were posted on the Investor Relations section of our website just after the close of trading today.
Before we take your questions I'd like to provide some highlights well results for the fourth quarter and year ended December 31st 2021, and give you a brief update on our operational progress.
The fourth quarter of 2021 was yet another quarter of record performance our six.
Consecutive quarter of records in many key financial metrics, delivering a solid conclusion to 2021 and a springboard for 2022 and beyond and.
In the fourth quarter of 2021 barrel reported record revenues of $22 million and that was a 38% increase compared with $14 $6 million reported for the same period in 2020, and an 8% increase over the sequential third quarter of 2021 .
Full year 2021 revenues grew 48% to $72 $5 million and that was from $48 $9 million in 'twenty 'twenty.
Fourth quarter gross profit was a record $15 $1 million or 42% increase over gross profit for the year.
Your earlier period of $10 $7 million and a 10% increase over the sequential third quarter of 2021.
Full year 2021 gross profit came in at $54 $3 million that was a 58% increase compared with full year 2020 gross profit up $34.4 million gross margin for the fourth quarter of 2021 increased to.
75% compared with the prior year's 73% and the sequential quarters, 74%.
Gross margin for full year 2021 was <unk> 75 per cent compared with 70% for full year 2020.
Adjusted EBITDA was $4 $6 million for the fourth quarter of 2021, compared with $4 million in the prior year period that was a 16% year over year increase adjusted EBITDA for full year 2021 rose to $19 five.
$5 million and that was compared with $5.7 million in the prior year period.
On the operational front, our actions in 2021 we're intensely focused on positioning Harrow health to fulfill its vision of becoming a leading U S eye care company.
For us to execute on that vision, we are one.
Focusing on a bottleneck surgical chronic and acute care prescription pharmaceuticals.
Two serving institutional customers these are doctors and hospitals and ambulatory surgery centers.
And three continuing to add high value FDA approved products to our portfolio.
We believe we made significant progress during 2021 and the execution of our strategic plan, including increasing the cash on our balance sheet to record levels, which we accomplished without diluting our shareholders and completing several transformative transactions all in.
Positioning us to move forward with the next steps in our strategic plan.
In 2022, we're focused on building the infrastructure to support the significant growth that we anticipate over the next few years beginning this year not only from recent acquisitions of drug candidates like Amp 100, and knock 100, if they're approved by the FDA, but also.
From internally developed formulations that we expect to launch commercially over the next 18 months or so.
Also we continue to be on the hunt for additional M&A opportunities that could further increase our growth potential.
In order to support this growth, we're expanding our existing commercial infrastructure, including adding eight experienced sales executives and ahead of market access we expect our team to be further expanded during 2022 as we prepare for the approval and launch of Am 100, and the relaunch of <unk>.
The Max patrol and MX Asa under our company umbrella.
In addition, we are focused on strengthening our internal expertise and capabilities within regulatory compliance quality and supply chain management. We are also in the process of establishing our own internal analytical lab, eliminating our reliance on third party labs, and enhancing our inventory management and <unk>.
Self distribution systems.
This year is already shaping up to be a breakout year for Harold we continue to see strong daily revenues to this day.
As we previously announced October 16th of this year is our Paducah date for Amp 100, and if approved we intend to be ready a few months thereafter to launch 100 into a market in which we have commercial credibility that would be the U S up almac surgical procedure market.
In addition, we expect to see value creation events from our Noncontrolling equity positions in companies that were originally founded as Harrow health subsidiaries before being the consolidator for example.
A few months, we expect surface ophthalmic to report data on a major chronic dry eye study. This was the first study of its kind ever go head to head against the two category leading F. D. A approved products a big study soon.
Soon thereafter, we expect milk pharmaceuticals to report topline data on its milk 300 clinical study.
These events unfold, we will continue to grow our core ophthalmic pharmaceuticals business launch new ophthalmic products, we've been internally developing and review the potential for new accretive transactions in our area of focus that's ophthalmic pharmaceuticals now.
Take your questions I'll pause to have our operator poll for questions operator.
We will now begin the question and answer session, if you'd like to join the question queue Press Star then one.
If you're using a speaker phone please pick up your handset before pressing any keys.
If you'd like to remove yourself from the question queue Press Star then two we will pause momentarily to assemble our roster.
And the first question comes from Brooks O'neil with Lake Street Capital markets. Please go ahead.
Good afternoon, Mark and congratulations on a terrific finish to the year.
Couple of questions I guess I'd start off by saying, it's notable that neither the.
Press release, I think your shareholder letter in your prepared comments seem to make any mention of COVID-19 . So I assume it wasn't a material.
Serial factor for you in the quarter.
Uh Huh, Thank you Brooks and yeah that that would be correct COVID-19 was.
Not a material effect on our business.
That's great.
Yeah.
And you're not you did you see much of it in in January .
We did I you know, they're every as I've said over the last couple of years now B B.
The effect of Covid has very much been a local.
In certain regions of the country.
Where ah patients have been reticent to come into the office from time to time when there has been a.
You know are a rapid spread or when a new variant has hit by and large are the fourth quarter, we really didn't detect a lot of that.
And then candidly you know as we entered into the first quarter of this year.
Things have been sort of business as usual and and even up until the month of March which I tried to highlight in my prepared remarks, no business is is very good actually.
Right.
It's fantastic you seem to be a fairly optimistic I guess is the right way to characterize it about F. D. A response on am 100 are there are there are some things that caused you to be so optimistic about the outlook for that product.
Well the ability to get through the F D. A.
Well first of all we are we don't want to diminish the process of of the product are becoming F. D. A approved and that's a process that.
You know we have to work through with the FDA with our partner sure, but what the reason why we're excited about Amp 100, frankly is first of all we do think we have a very strong chance of getting the product approved or Purdue date is in the month of October as I mentioned.
So it's coming up and I think the.
The reason why we're excited about the product frankly is first of all its patented through 'twenty 37.
It is an intra operative pain medication, there's a large market for products like this the cataract surgery market alone is four and a half million annual procedures and growing in a few years it'll be 6 million procedures annually.
And unlike a lot of companies that have had products like this get approved.
We have a strong existing presence in that market, we have thousands and thousands of customer relationships today.
And we intend to apply for pass through status.
If the product is approved.
And you know I think the bottom line is when we when we add up the size of the market the potential revenue per unit and the ability for this product to really make a big impact for patients and physicians around the country. We think it's not only great for our shareholders, but it will also be an incredible complementary.
The product for the rest of our surgical portfolio. So we were very excited about it.
Is that part of the reason that you're planning to invest.
Fairly aggressively to build your infrastructure or or as you're thinking much broader than that about that.
The long term potential you have in the eye care services business.
Yeah. So the investments that we're making Brooks for Amp 100 are consistent with the sort of infrastructure that we need not only for Amp 100, but also for Mac 102.
Further the the successful relaunch of IATA, Dean marks Asa and Max control as well as potentially other products that we're on the hunt for now these are investments that we need to make that frankly, if we didn't make it would be sort of CEO malpractice not to make those investments and the.
Good news for US is that the juice is definitely worth the squeeze in this case you know the market opportunity for us for our shareholders the value creation of our unapproved endpoint 100, and the successful relaunch of some of those products is significant for our shareholders that is why.
I've said with relative confidence that when these products get approved we expect to see you know our revenues more than double in fairly short order. So this is an exciting time for us. This is a moment in the company's history that we've been working towards for over eight years and our you know.
It's a there's a there's a lot of energy within the company for what we're doing and where we're going.
I always say you know some companies are R. R. R.
Our going someplace in other companies or not we feel like were definitely.
Going somewhere and going somewhere good.
Great.
Just ask one or two more.
J D N says you're providing that so.
The one thing I'm curious about is just if you can characterize the customer response, obviously the sales momentum is going in and of itself, but you know the broadening of your strategy to include the FDA approved products and whatnot could you describe.
You know the response you get from Us.
With surgeons and in their offices in terms of do they see this as a natural extension of what you do for them or how would you characterize the way they are responding to your broadened product offering.
Well first and foremost we view ourselves as a partner for.
For the eye care professional to the eye care professional we are there to help them do a better job of more successful job of caring for these patients across the United States. So we view ourselves as a partner that's the way we've built the business. We are very much a bottoms up organization all of the.
Ideas for the products that we have built over the last eight years have not come from me necessarily they've come from conversations that we've had with our customers they tell us what they need.
So that they can do a better job caring for their their patients. So that's the way we built the business and what is clear is that they want in addition to the.
First in class compounded products that we've made over the last eight years. We're now the obviously the largest provider of those products in the country. They also one FDA approved products as well and so we are going to have a unique portfolio of not only a C. G. M. P compounded products that's product.
That are made in an FDA registered facility to the highest federal standards, but we're also going to have FDA approved products.
And that's what our customers want and that's where we're going and we will uniquely I think be the only ophthalmic pharmaceutical company in the country to have such a broad offering.
That's fantastic.
Just ask one last one so you mentioned the exciting developments with surface and I think you mentioned that they're preparing for.
Phase two read out.
What would be the natural sort of pathway to full approval for surfaces products.
Got it.
Yes, so the two to be clear the surf 100 study is a readout for a seven arm study in chronic dry eye.
We believe that the dry eye market is a highly underserved market. There are products that are approved in that market.
However, you know patients don't stay on those therapies for very long those products are very expensive and there are a number of challenges with those products yet they're good products in their F. D. A approved so we see a big opportunity. There. The study that surface is undertaken is completely unique in that it.
Is going head to head against the two.
Largest products in that market that are FDA approved no one has had.
You know the will to do that and so surface has taken that on and what I would suggest as you know the value of our interest in that company and the direction of the.
Phase three studies you know the ultimate studies that that the company does for approval will be determined by this readout and we're really excited about this readout in the readout is going to happen here very very soon.
And that will I think you know be a very interesting of interest to a lot of big companies, who are interested in the dry eye market. So we're excited about it it's not six months away. It's a couple of months away or sooner and it's it's exciting.
Great. Thank you very much appreciate all your answers thank.
Thank you Brooks.
Pardon me one moment.
Your insane technical difficulties please standby.
Okay. The next question comes from Jeffrey Cohen with Ladenburg Thalmann. Please go ahead.
Hi, This is actually destiny on for Jeff just a couple from us in reading your letter to the stockholders I noticed that you mentioned and electronic quality management system that Youre planning on implementing through 2022 what kind of efficiencies would you expect to see from that and what kind of impacts do you.
It having on your current facility.
Yeah. Thanks, Thanks for the question Destiny and the EQM as system that we're integrating into our facility in New Jersey is really not unlike some of the other quality management systems that we're putting in place we don't.
That for them to be a big hit in terms of their cost.
They're really sort of an operational necessity as we as we prepare that facility I think for the volumes that that we expect.
To dispense you know over the coming years.
But but we don't see it as a big operational cost or something that would impact our financials at all if.
If that answers your question.
Yeah. It does thank you and I'm curious a little bit about how your supply chain is looking I know we've heard from some other companies that there's been disruptions in that it didn't sound to me like in your prepared remarks, you mentioned anything about there being bottlenecks. So I'm just curious how that looks.
Yeah. So you know it was the case that you know over the last few years, we've really managed inventories of key supplies and active ingredients on a more of a just in time basis, but you know we've seen rumblings of this since the third quarter of last year and so we're now manage.
Our supply chain, a little bit differently were increasing inventories of certain ingredients and components of what we build.
But we really haven't seen huge cost increases which is terrific.
And you know I think it's just a slight change in the way, we manage our supply chain, but no major issues you know two to speak of.
Okay, that's great to hear.
Turning maybe to the vision all of your platform.
Can you give us an update on that are you learning anything from the current experience that you're having with patients that have maybe formed or molded you our strategy.
We are you know where I I still and our team continues to be very excited about vision Ology I think one of the the changes in strategy is that we have seen over the last 12 to 18 months a lot of companies in the direct to consumer space spend Ah got off.
Full amount of money on customer acquisition costs. So those costs are considerable and what we're doing with our platform is a little bit different in that we have a database of customers that we already serve and so that number is greater than 1 million.
And people and so we think there's tremendous value in leveraging the software the platform that we've built not in spending money on advertisements with Facebook and Google and others like that rather we intend to leverage our customer base for the existing customers that are purchasing our products day.
And day out tens of thousands of shipments on a monthly basis. That's the way we're going to leverage the vision allergy platform. So vision knowledge is alive and well and this is probably I hope to be expected from our management team were fairly parsimonious every dollar matters to us and the opportunity to.
Leverage our customer base and offer the vision allergy platform and services at a near zero customer acquisition cost is is the way we're going to attack that market.
Yeah that makes it makes total sense I know what the changes.
In Iowa.
We've been hearing a lot about higher customer acquisition cost. So I think it's great that you're able to leverage the database you already have I just the last quickie for me what was that impairment charge that you reported for the quarter in your Opex. Thank you so much for taking our questions.
So much destiny, Andrew I'm going to flip that to you.
Sure, Hey, destiny that impairment charges related to some trademarks that we we.
There are no longer using.
Okay got it thank you.
Thank you destiny.
The next question comes from Justin Walsh with B Riley Securities. Please go ahead.
Hi, Congrats on the progress thanks for taking the questions.
To start I think you addressed how your current customers seem excited to make use of am 100, but I was wondering if you can comment on potential for the product to draw new customers, who might also then tap into your broader offerings.
Absolutely Justin and that that is a great.
The observation of a great question because.
There are a lot of doctors out there there are a lot of surgery centers that just do not want to use compounded products and even though we do a great job. We're incredibly innovative we provide an amazing service and the results speak for themselves with the doctors that use the <unk>.
Alex that we make.
All that said as I said, many accounts do not want to use compounded products. They prefer FDA approved products they prefer branded products.
Some are open to a mix and what we believe is that when we have amp 100, when we have mark say so.
When we have a max of troll and I offer Dean and hopefully some others over in due course.
We're gonna have really what we feel is an unassailable way to serve our customers to provide them with FDA approved products. If they want so that's a great new way to open accounts to your point, but at the same time, it's a way for us.
Two land and then hopefully expand and offer the rest of the portfolio that we have a when we look at the the.
Products that the average ophthalmologist prescribes day in and day out when we overlay our portfolio on top of that we make about 70% of the types of drugs in the various categories of drugs that the average ophthalmologist uses day in and day out and his or her practice, so having the F D.
A proof products, coupled with with our existing compounded offerings.
<unk> is going to be as we say you know a fairly unassailable and highly unique in our market I don't think anybody.
In the United States will have a portfolio like that.
Great. Thanks.
My next question.
You, obviously can't and shouldn't try to speak for regulators, but I was wondering if you could provide some color on the Mac 100 data package you planned to present is that the clinical data solely from Japanese patients and if so need do you think the FDA might give some pushback there and then just to follow that up if they do what.
Do you think the next steps would be some sort of a bridging study.
Yeah. That's I appreciate that question because when we took this project on I think our assumption.
From the beginning was that we were gonna have to do some sort of study and that's the way we budgeted for things that's the way.
We've approached the project from the beginning so if we're able to leverage the <unk> the Japanese data the Japanese experience that.
That would be terrific. If we have to do a small bridging study that is a fairly.
You know benign expense for us in a very benign benign risk given the the the active ingredient and the type of study that we would have to conduct.
So you know where we are planning to be in front of the F. D. A here fairly soon.
Towards the middle part of this year.
You know and and and we'll learn we definitely.
Looking forward to that and as I said to.
To the extent that we cannot leverage the Japanese data, we are prepared to conduct.
Fairly small and relatively inexpensive and low risk.
Ah study to to ultimately create an NDA filing.
Got it thanks, one one more quick one for me.
I'm wondering if you can provide any more color on what you look for any assets that you might acquire I mean clearly.
Dolnick Prada.
Products that could have some some synergies there, but I'm wondering if there's sort of any anything else that you look for in the types of products that you are interested in.
Yeah, you know I don't want to speak too much to that because you know we are in the process of looking at assets now and I don't want to create any competition.
But suffice it to say that.
As I said in the stockholder letter we're strong in surgical we're very interested in surgical products, where we're very interested in segments of the chronic care market as well and that would that would specifically relate to the.
The dry eye space as well as the glaucoma market the fastest growing part of our business in terms of of Oh for revenue and units shipped is is in the dry eye space.
We've been serving you know hundreds and hundreds of additional patients on a daily basis, who suffer from dry eye and us and helping them with prescription medications. So.
Those are the areas that we're interested in and you know we're also interested as I said in higher value products. Historically, when you look at the average cost of of an improvements Rx formulation.
Sub $30 on average and the products I think that youre going to see us come to market with over the next few years, including Amp 100 will be a premium priced products there'll be high value products not only for our stockholders, but also for the clinicians and the patients.
Who use them. So you know I don't know if that totally answers your question, but.
We're really on the hunt for those surgical and chronic care products.
And and products that are approve.
Our proved or I'm.
Extremely low risk of approval or two approval.
Great. Thank you thanks for asking they are entering the question.
Thank you Justin.
The next question comes from Nathan Weinstein with Aegis capital. Please go ahead.
Hi, Mark and Hugh and Jamie in the overall Harrow team. So thanks for taking my questions and firstly congratulations on the very strong performance in the quarter and for the full year it must be quite gratifying and I just wanted to begin with the question about the drivers of revenue growth and clearly you mentioned record units.
It is great, but perhaps you could speak to some of the other factors such as pricing and new account openings and how those kind of trended in the quarter.
Yeah.
I don't have any specific data to provide you Nathan and thanks for the questions on a growth in customer accounts or like you know what I. What I can tell you is anecdotally Umm that as we as the end of the <unk>.
Fourth quarter happened as we as we came into the first quarter I you know when I start looking at.
Internal data new accounts that are being opened it always amazes me.
At Oh, I think that we have saturated the market I question have we saturated the market and what I can tell you is over the last.
Three months Ive had six friends.
Get a lens exchange procedure.
And of the six none of them have actually used our products and and of course, none of the doctors who've used our products and so that always amazes me you know when I think that we've saturated the market how many more opportunities are out there for us.
Accounts to get in front of them and some of those accounts are like are the ones I referenced with Justin's question. You know they just don't use compounded formulations and so those are accounts that we intend to hit up when we have an endpoint of hundreds.
But we just continue to see and it's it's month in and month out and this has been going on literally for eight years, our commercial team, John Sahara, and Cindy and Adam and Hain. The whole team. There has just done such a fabulous job at continuing month after month for year after year.
At opening new accounts and it just keeps happening and I think it's going to continue to happen you know for years to come believe it or not.
Wow, Great March you actually preempted and sort of my second and final question, which is that.
Slide six in your Investor presentation has always been one of my favorite slides, which you can just hold the ruler over the company's <unk>.
Revenue growth and margin expansion over the years, it's kind of what drew us to covering the company in the first place and I guess structurally and you sort of did you speak to this but maybe I'll ask each to expand upon it structurally do you see any impediments, particularly in the base business, where we can continue that trend of revenue growth and margin expansion ahead.
Yeah, let me be clear, we see the base business continuing to grow we are that is critical and those are the customers that we're going to you know initially sell the endpoint hundred product into and others that we plan to launch so we see the base business continuing.
To grow we see as these new products get introduced and more revenue flows from those new products, we see margins actually rising continuing to rise.
You know to give you an idea our margins in the branded pharma space can be certainly north of 90% and so you know when you think of layering on more revenue at that rate versus the level of revenue that we're at now and where we're going in 2022.
The reported rates you can see how margins are going to continue to rise I think what's really exciting about the the next.
Year or two is that we've seen a lot of companies over the years get products approved public companies and they may have to go out and do two things first of all they've got to dilute shareholders or otherwise access the capital to launch a product commercially shareholders end up getting whacked.
You know it can be very expensive and more importantly, it's risky because you just don't know whether the team that you assemble is going to be able to sell the product.
Or that customers will adopt it and in our case, we have that amazing commercial team and we have a large customer base.
And we sell a lot of products in the same category as Amp 100 already and so the belief is that those customers will go from the compounded drug to an FDA approved alternative and when they do that that's great for them and it's great for us.
So it's a really exciting time, we're not gonna have to dilute our shareholders necessarily to launch Amp 100 were in a position to be able to use the profits that this team has been able to generate through their hard work and creativity.
To launch these high margin high value products.
Well I'm fantastic. Thank you for the color Mark and congrats to you and the whole team for the strong performance.
Thank you Nathan we really appreciate your interest.
Again, if you'd like to ask a question press Star then one to join the queue. The next question comes from Shawn Boyd with next Mark Capital. Please go ahead.
Good afternoon can you hear me okay.
I can't Sean.
Okay.
Good.
Just a little bit here.
<unk>.
I might be doing this wrong, but if we back out the <unk> Commission revenues.
You did roughly $69 million, that's after two years and the $50 million range on that kind of.
Broad basket of products that we keep talking about.
I know that we've we've talked quite a bit about the branded products and where we're going.
But that last question was a great one and you mentioned that.
The intent is of course to continue to grow that.
Are we looking at 40% years are we looking at 20, 20%.
Help me on.
10% help me on what you think is a sustainable growth rate for that kind of broad existing portfolio do you intend to have in the background.
Layer on these incremental products.
Yeah. So you know first of all we don't provide guidance at all and you know.
So let me just say that secondly, obviously the there were there were parts of the 'twenty 'twenty period.
Were affected by Covid for sure, but nevertheless, I think even if you were to normalize. Our 2020 period are we still did very well and grew nicely I can't tell you, whether we're going to grow at 2030 or 40% in 2022 over 2021 .
What I can tell you is that we continue to see and I mentioned this to this very day.
Fantastic Daily revenue numbers, so we don't see the business yielding in terms of its growth that's the core business.
And that is necessary. So that we have a successful launch of some of.
The the other products that we've mentioned I do want to.
To put an exclamation point on what the opportunity is though with Amp 100.
Because our products are.
For example that are eligible for pass through are generally premium priced products and when you look at what the value is on a per unit basis for a product like that.
And you multiply that by the existing presence that we have in the cataract surgery market. For example, you know we.
We're talking about north of 2 million units shipped sterile ophthalmic units shipped last year and growing.
And you know if you were to you know.
Just discount that slightly and say hey, these guys are probably touching a million cataract surgeries a year already.
And you multiply a million times, what a pass through eligible product sells for.
You come up with a big number and so that's what we're really swinging for that's what the real opportunity is for us and so we're excited about the the numbers that we're putting up with the base business. It will continue to grow it is growing we see that growth in the first quarter, but what I think we want shareholders to focus in on it's not only that continued growth which is.
Going to fund in a non dilutive way the buildout of the infrastructure that's needed to launch Amp and Mac and some of these other products.
But what that 2023 number looks like 'twenty 'twenty four 2025 Ah that's that's where we think the real value is and I think if you look at the price of our stock.
You know.
You have to determine whether or not all of that is baked into the price.
Got it alright.
One other if I may.
On the investment.
Ramping up this year, so the company looks like.
$53 million in total operating expenses in 2021.
Give us a ballpark where are we going here is that.
Substantially above as we go into next year, you're going to run the company.
The cash breakeven business and spend whatever upside you need to.
What can you give us on that.
<unk>.
Andrew I'm going to throw it to you.
John I've been like Mark said, we don't provide guidance.
One of the things we mentioned in the shareholder letter or is that.
The business will produce positive adjusted EBITDA.
We have a history of kind of being very parsimonious with.
Money, we spend so we're not going to go out and.
Spend $20 on things, we don't need.
But a lot of that capital a lot of the investment is going to go and head count.
So we expect a pretty big growth in head count this year.
A lot of that on the sales and marketing side.
I don't think we can hire fast enough, where we'd be burning through all of the the adjusted EBITDA.
And I, just don't think that would be possible.
So it's gonna be it's like like Blair says it'll affect the operating margin. It will still be positive I think it will still be substantial.
But certainly won't be the same number that we hit in 2021.
Yeah.
Got it okay. Thank you Andrew Thank you Mark and good luck.
Thank you Sean.
This concludes our question and answer session I'll turn the conference back over to Mark Baum for any closing remarks.
Thank you Tom So in closing I want to thank everyone. On this call for your interest in Harrow Health I would also like to personally. Thank all of our employees for their hard work and contributions to making this an exciting time to be a part of our company internally. There is a growing positive energy I would.
Call It a buzz about what we've accomplished in the past, but importantly, what we're expecting to accomplish in the next few years and really what we're going to see happen in the next few months. This is a catalyst rich period for us. There's a lot of hard work ahead, but our employees have proven themselves to be up to the task time.
Time again, I look forward to sharing the journey alongside each member of our growing employee base as well as each shareholder of Harrow health to witness what we're truly capable of achieving thanks to everyone for attending today's call and for your interest in Harrow Health. If you have any investor related questions. Please email Jamie.
At Jay Webb W. E B B at Harrow, Inc. Dot com.
This will conclude our call.
The conference.
<unk> is now concluded. Thank you for attending today's presentation and you may now disconnect.
Okay.
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