Q2 2022 Enzo Biochem Inc Earnings Call
Greetings and welcome to the Enzo Biochem, Inc. Second quarter 2022 financial results and business update conference call. At this time, all participants are in a listen only mode.
Brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference. Please press star zero on your telephone keypad.
As a reminder, this conference is being recorded.
It's now my pleasure to introduce your host David Holmes Investor Relations. Thank you David you may begin.
Thank you operator, and good afternoon joining.
Joining us today from the company are Hamid or funny, and Chief Executive Officer, and David <unk>, Chief Financial Officer.
And so issued a press release.
Detailing its financial results for the second quarter of the fiscal year. This afternoon and is now available on the Investor Relations section of the website.
Before we begin I would like to read the company's safe Harbor statement.
Except for historical information the matters discussed in this news release may be considered forward looking statements within the meaning of section 27, a of the Securities Act of 1933 as amended and section 21 E of the Securities Exchange Act of 1934.
A mandate such.
Such statements include declarations regarding the intent belief or current expectations of the company and its management, including those related to cash flow gross margins revenue and expenses, which are dependent on a number of factors outside the control of the company, including the markets for the company's products and server.
Cost of goods and services other expenses government regulation litigation and general business conditions.
Please see risk factors in the company's Form 10-K for the fiscal year ended July 31, 2021 investors are cautioned.
That any such forward looking statements are not guarantees of future performance and involve a number of risks and uncertainties that could materially affect actual results.
Company disclaims any obligation to update any forward.
The statements as a result of developments occurring after the date of this conference call.
During this conference call the company may refer to EBITDA, a non-GAAP measure.
EBITDA is not and should not be considered an alternative to net income or loss income or loss from operations or any other measure.
Determining operating performance.
Company has provided a reconciliation of the difference to GAAP on its website www, Enzo com and in its press release issued this afternoon.
I would now like to turn the call over to Hamid <unk>, Chief Executive Officer of Enzo Biochem Hamid. Please go ahead.
Thank you David Good afternoon, and thank you for joining us on our second quarter business and financial update call today.
This afternoon, we issued our second quarter 2022 financial and operating results.
Second quarter revenue was $34 million up a strong 28% sequentially and a solid 8% year over year compared to fiscal year 2021 .
I am proud to say that on behalf of the entire Enzo team. This is the highest quarterly revenue in history of the company.
Enzo life Sciences revenue reached $10.4 million, an increase of 39% year over year and its product margin increased to 49%.
Enzo clinical services revenue reached $23 $7 million, an increase of 20% from the first quarter of fiscal 2022 and in line with the $24 million.
In the year ago period.
I will begin todays conference call with a summary of company's strategic vision highlighting notable achievements.
And then provide some perspective on the current testing landscape and life Sciences market.
I joined Enzo in November to affect change.
Namely to lead the commercialization of <unk> core assets and to build a management structure and operational focus.
As I mentioned on last quarters call. We are building off a strong foundation and setting a vision and establishing strategies in the following areas.
Market expansion of the car.
Current product portfolio in our life Science says division.
Commercialization of the diagnostics platforms growing and optimizing the clinical services segment.
Our approach is one focused return.
Prioritizing those segments that will provide the best short term and long term returns on investment.
During the past four months since I joined Enzo the management team and I have been focused around execution and transition planning, which I'm really excited to discuss today.
Afterwards, I'll pass the call over to David bench, our CFO to review the financials in greater detail and then we will open the call for question and answer session.
The evolution of Enzo over the last few months has been extra ordinary in several ways.
After a few positive months.
At the company I have completed the initial dive into the operations and business segments.
Based on this interaction with our team I'm confident that the senior leadership team staff and employees are aligned.
It quickly became apparent that the iva surrounded by like minded colleagues that understood. The under appreciated portfolio of assets that Enzo pause that says.
They have a collective desire to drive our growth and operational excellence across our businesses.
I am impressed in there day in and day out by the unwavering dedication and work exhibited across the company from our cohesive team.
We are also augmenting our C suite and management team to strengthen our capabilities in our highest growth product areas and advance some of our commercial and operational initiatives.
We anticipate making some announcements shortly regarding internal changes and the company is planning to selectively expand our executive leadership team, including adding head of commercialization director of research and development.
And a general counsel.
Aside from building the full team we are laser focused on operations.
And the clinical lab side, we are leveraging our success during the panda pandemic to expand our higher margin testing business.
And new customer groups, while building our product menu.
Remember our success during COVID-19 was primarily due to our ability to manufacture our own reagents and run PCR testing on our own platform.
Our expanding this molecular capability to other modalities, including women's health and sexually transmitted infection testing.
In this regard we are excited to announce that we have recently received New York State Department of health approval for the use of Enzo Chlamydia Gonorrhea Trichomonacide test on our Gen flex.
Proprietary platform.
This test is a real time PCR based method for Cte <unk> TB detection in multiple transport media.
These internal capabilities are crucial to the long term profitability of the laboratory, while the company anticipates continued COVID-19.
Testing throughout the second half of fiscal year, 2022 and potentially beyond.
We expect that COVID-19, vaccinations and Therapeutics will result in a continued decline in demand for COVID-19 PCR testing.
To counter this COVID-19 decline we are expanding.
Expanding our menu of clinical lab tests being offered as well as the customer types to whom we offer our services.
We have already identified and are working on several compelling opportunities to service urgent care facilities and offer lab to lab services to other laboratories.
We also continue to expect our routine testing business to recover as in person physician visits increase back to pre pandemic levels.
Our direct to consumer offering that Enzo launched in fiscal year 2021 year is more than an exciting proof of concept.
Go Test me now is an important platform and it provides access to patients to help them take control of their own health care.
Our COVID-19 testing through our direct to consumer offering was strong during the quarter with approximately $150000 in test billing.
The recent launch of sexually transmitted infection or STI testing using the same platform expand that offering.
And we anticipate additional growth in that space.
We have received inbound interest from customers outside our typical customer base and expect to leverage existing relationships and partnerships to grow this offering.
In coming quarters, we anticipate focusing on internalizing many of the tasks that'd be a currently sending out this will enable our laboratory to run more efficiently improve turnaround times increased access to reimbursement and better serve.
With our current customers.
Along with this initiative, we intend to rollout specialty laboratory testing menus to expand or to expand our already comprehensive menu of offering as well as access to physician networks focused on those specialties.
Enzo clinical labs is located in one of the most desirable demographic areas in the country. It's access to many world class institutions at already enjoy our services.
<unk> to further expand those services with the ambition of becoming that leading reference laboratory in this region.
My background and relationships are deeply rooted in diagnostics arena.
Confident this will aid us in making the connections necessary to build and grow our service operations into a more comprehensive and exceptional clinical laboratory operations.
Under Enzo life Sciences side, we exhibited solid growth in second in the second quarter.
And our average order size remained strong at approximately <unk> hundred dollars.
Or over $1150 per order when adjusting for large orders.
This is a favorable trend from the sub $1000 per order levels only a couple of years ago.
Q2 average order size has increased by more than 2500 basis points.
Compared to fiscal year 2019.
Excluding these large orders.
We service a variety of markets and our.
And our longer term priority is to align Enzo life Sciences business with the markets that offer greater revenue potential with more consistent and larger orders.
We are excited to announce that we successfully transitioned the entire Ann Arbor manufacturing to Farmingdale.
In under six months the expansion of our footprint in Farmingdale, which allowed for consolidation of operations onto one campus.
Is driving operating efficiencies, while also accommodating our ability to grow both today and into the future.
We'll continue to invest in physical plant and operating facilities in Farmingdale.
We will update you on our progress as development milestones are reached.
From a commercialization perspective, we are developing and commercializing point of care platforms directing to emerging trends upbringing.
Testing closer to the patient.
And our loop RNA technology, which is a significant advancement in drug development technology.
We believe commercializing these technologies will offer a strong long term return on investment.
It is important to highlight continued development of other life sciences, and diagnostics platforms, including Immunohistochemistry, cytology immuno diagnostics as well as Enzo unique structure.
Enzo is one of only a few companies in the world that is able to leverage combined assets from biotechnology life Sciences and clinical services.
We employ each of our segments to the benefit of the other and ensure they're working together in a wall well coordinated strategy. We are dedicated to prioritizing our resources and technology to address the most attractive business segment.
And growth areas that will drive both near term and long term growth for shareholders.
Investing in our technologies.
From a commercialization standpoint, we are investing in technology that enables our business. This includes our website and.
In our customer facing assets.
Okay.
We have a plan to place that we have a plan in place to launch a global state of the art website in under one year from now this new web site is specifically designed to optimize our transactional capabilities and rival other E comm.
<unk> sites in life Sciences area, while strengthening and those brand awareness.
Facilitating customer integration and an easy to use portal to review product details and providing a friction less.
Reordering platform.
These capabilities will further differentiate the Enzo customer experience for a highly confident of our services and products, but this refreshed website will improve our ability to attract new customers and facilitate product investigation.
And ordering for all of our customers.
You will be investing in our in other technologies, including an update to our Enzo direct patient and physician portal in the near future.
As mentioned earlier our approach is one up focused return.
We're further leveraging the strength capability and proximity of our clinical lab services and life Sciences Division.
All within four buildings located at our Farmingdale campus.
A crucial focus for our management team is re aligning and modernizing the organizational structure of the company to optimize execution efficiency and accountability.
This must be accomplished while minimizing redundancies and legacy offerings, which do not currently resonate with our customers or the evolving.
Evolving need.
The industry.
We are prioritizing a few key areas, which we believe have the most bang for our Buck that is the best return on investment.
We will continue to drive cost efficiencies across the business and position the company well for key partnership discussions are strategic opportunities that will complement our integrated model to this and we're also launching new initiatives that will expand.
And upon the $10 million of savings recently achieved.
The corporate goal is to achieve an additional $10 million in cost savings at $5 million of it Tom.
Targeted toward a calendar for this calendar year.
With that review of our operations and redirection I want to welcome our newest member of the board of directors, Mr. Brad right off.
<unk> joined in January at the same time that I joined the board and we are fortunate to have him as a director.
I believe that board dialogue, we will benefit from his experience in the areas of corporate governance.
Capital allocation.
Operational turnarounds and strategic reviews.
The company also announced that Dr. Mary Tagliaferri became the chair of the board of directors.
This quarter and we welcomed her leadership.
In summary, I'm very encouraged with the outlook of Enzo business, new commercial opportunities in our core business.
The potential expansion of our senior management team.
And our business development effort to search.
<unk> and selectively add new products and services, while driving greater operating efficiencies within our business.
In my previous roles. What has made me successful has been under promising and over delivering.
During the next few quarters I expect to provide our investors with updates regarding our progress towards delivery of what we promised during our quarterly calls as well as providing more information about our strategy and opportunities on a go forward basis.
<unk>.
With these insights I would like to turn the call over to our CFO , Mr. David bench for a detailed review of our second quarter financials.
David.
Thanks, Amit.
To reiterate <unk> comments earlier, we are pleased with our second quarter performance as we achieved a significant revenue milestone, which demonstrates our approach and strategy is bearing fruit across the different business segments. I am proud to report than the second quarter and Enzo clinical labs, our team was able to add over.
For 50, new customers key to building upon our base and expanding our customer reach.
Here's a review of the financials for the quarter.
Total revenue reached $34 million for the second quarter, an increase of 8% compared to $31 5 million in the second quarter of last year, and a robust 28% increase sequentially compared to the first quarter of fiscal year 2022.
On the divisional basis clinical services revenue for the second quarter was $23 $7 million, an increase of 20% sequentially compared to $19 $7 million in the first quarter of fiscal year 2022, and a slight decrease from the $24 million in the second quarter of 2021. So.
<unk> improvement was driven by increased service accession counts rebounding off of the summer lows.
Enzo generated over 100000 accessions in each month of the quarter.
Enzo life Science revenue for the second quarter was $10 4 million and.
An increase of 39% from seven $5 billion in the year ago period.
As mentioned earlier, we have completed the transition from the Ann Arbor, Michigan facility and are benefiting from our upgraded GMP facility.
<unk> New York campus.
The blended gross margin for the quarter declined two percentage points from the year ago period to 48% on a consolidated basis.
Enzo clinical lab services margin of 47% declined more than 400 basis points from the preceding quarter, but was slightly lower than the 51% gross margin in the year ago comparable period.
The sequential increase was due to the testing mix and specifically high levels of academic institution testing.
And the life science gross margin improved by 940 basis points to more than 49% over the 40% margin in the first quarter and an increase of 200 basis points as compared to the 47, 4% in Q2 2021.
Research and development expenses remained flat at zero point $8 million or 2% of total revenue consistent with a year ago period.
General and administrative expenses, excluding onetime compensation expenses increased to $14 $5 million from $11 million from the year ago period, the higher SG&A expense was primarily due to investment in sales marketing and.
To support growth <unk>.
Included in SG&A expenses quarter with compensation expense on a net basis of $1 $7 million due.
Due to severance and other discrete matters legal and other expenses increased primarily due to strategic projects and other legal matters.
Adjusted EBITDA in the quarter totaled $2 $5 million versus adjusted EBITDA of $4 $3 million in second quarter of 2021.
GAAP net loss was $2 7 million or negative <unk> <unk> per share versus net income of $2 $3 million or five cents per share in the year ago period.
Cash and cash equivalents restricted cash and marketable securities totaled $34 $6 million at the end of the second quarter a decline from $44 2 million at the end of fiscal year 2021, due to strategic initiatives border corporate matters investment in inventory and greater investment in working capital.
Days sales outstanding and millions of clinical lab continues to trend at approximately 30 days as of January 31, 2022, The company had $48 5 million shares outstanding.
As indicated earlier Enzo continues to explore cost savings opportunities and we have expanded our initial goal of an additional $10 million in savings with $5 million targeted for calendar year 2022.
The company remains committed to investing in key technologies and infrastructure to minimize friction and transaction costs where possible.
We anticipate the launch of our updated web presence in the first quarter of calendar year, 2023, which will enable increased brand awareness deep product research and seamless transactional capabilities to conclude I want to highlight the improvement in our current ratio to two <unk> from $2 three X during the second quarter of 2021.
Sure.
This is indicative of our clean and improving balance sheet.
Lastly, we showed an improvement of $3 4 million and shareholders' equity on a year over year basis.
I'll turn the call back over to Amit for closing remarks.
Thank you David.
While we while we will seek to organically grow our clinical lab and life sciences segments as well as to commercialize our proprietary diagnostic platforms. We believe the team at Enzo should seek to advantageously consummate tuck in acquisitions worked with.
Strategic partners and add complementary product opportunities.
This is a strategy that has successfully accomplished at my previous company and I believe we have the right group of people and assets to achieve M&A and partnership success here at Enzo.
We are confident in our strategic vision and our ability to execute on it in the year ahead, two are growing as well as <unk>.
Positioned company.
Thereby building, both short term and long term shareholder value through our focused return approach.
On behalf of the management team I would like to take a moment to thank the entire Enzo team for their tremendous commitment and focus that allowed the company to set a record for quarterly revenues.
At this time.
Greater please open the floor to questions.
Thank you we will now be conducting a question and answer session. If you would like to ask a question. Please press star one on your telephone keypad, a confirmation tone will indicate that your line is in the question queue.
First start to if you would like to remove your question from the queue for participants using speaker equipment may be necessary to pick up your handset before pressing historically monro.
One moment, please while we poll for questions.
Okay.
Okay.
Okay.
Yeah.
Okay.
The reminder, if you'd like to ask a question. Please press star one on your telephone keypad.
Thank you.
Our first question comes from Paul Nori with Noble equity funds. Please proceed with your question.
Hey, just wondering if any of the strength and the product's life science as part of the business was from Covid or if it was strictly.
Your traditional customers.
So Paul again, thank you for your question I'm sorry. The question was if any of that.
Life Sciences products contributed to Covid testing and our success did I understand that question correctly.
Just if any of the revenues in that segment or from Covid.
On the life Sciences side no. It wasn't our life sciences side contribute at products that we brought into the laboratory and be used however, the revenue that you see was not contributed from Covid.
Okay alright, thank you.
Thank you. Our next question comes from James will private Investor. Please proceed with your question.
Good afternoon.
Great revenue crude disappointing on some of the other expense items.
But I will just keep a couple of things being you havent addressed the 10-Q.
Q yet.
Where we can get some insights into the pipeline for June Flix yeah.
Sure Meyer, we're sure yeah more into that strategy and investment behind that.
Krish Krishnan I do have to calculate this.
Perfect. Thank you Mr. Walt great to hear from you on the Gen Flex pipeline I mean first of all it was exciting quarter for us because we received.
Our approval from New York State for to use up.
Yeah.
Again.
Gonorrhea Chlamydia actualized check ammonia.
<unk>.
To be able to use it within the laboratory. This is at the first phase of our regulatory as we continue to expand and augment our regulatory approach to be able to take those what we are using in the lab and place them in other laboratories as you know in order to be able to play.
<unk> said in various labs outside of our lab, we require expanded regulatory approvals and this was again along the path to a step that we identified and we were able to execute at this quarter and we continue to leverage it it's been a very useful platform for ours within our.
Facility, we've been able to generate many millions of dollars as a result of the Covid testing and we anticipate tremendous savings around these markers that we just recently got FDA approved and this is very much along the path with expanded regulatory approved for us to be able.
To place them in other laboratories and commercialize it does that answer your question.
That does that I was hearing your impression Oh, the regulatory approval has been achieved to placed in apps.
Oh.
Alright.
Not.
The addition of licenses.
Fired.
And and is there a.
Once those are approved.
Right.
Okay.
Some of the sales channel into closer to signing or.
Didn't know if there is a backlog of waiving certain things on that side of things.
Absolutely so very good question so.
Currently the regulatory approvals that were achieved is for ADT, which is lab developed test, which gives you the ability to market the platform for research use only.
Expanded regulatory approvals in Europe would be IBD or registration, which we are working on in United States. It would be either it would be a five 10-K achieved men and in Asia market in specific and Asia would be.
You know see FDA or Chinese FDA approval again in in and again. These are some of the milestone was for us to achieve the LDP approval to be able to use it within our organization and from there we could expand it to be able to gain at dish.
And all.
Regulatory approval to be able to market it and growth outside of there. So we are we are on the path but.
B R I V.
I'd say few quarters away from being able to get the expanded.
Regulatory approval to commercialize it within a within the European market and inside of the United States at by their customer basis for research use only we are free to market. Those but then again the commercial leg of research use only product.
It is not as broad as you would have it with regulatory cleared products.
Does that answer your question.
We had those approvals or even death.
He had your approvals and maybe is under the Emergency Act.
Because.
Maybe a question today Ruby Henry G&A correct.
Henry Jim Frakes machines do you have an operation with you know who I am.
And then Henry do rehab inventory for sale at the end.
Is it accretive Roche at the beginning of the cooler.
So we have somewhere around 20 gentle access roughly around 20 Gen flex in the laboratory in in in use and we obtain.
A number of Gen Flex says in order to be able to utilize them as our volumes continue to grow.
Yes.
Yeah.
Thank you. Our next question comes from Christian Schwab with Craig Hallum. Please proceed with your question.
Hey, guys I just have a few questions actually.
Actually representing myself as a individual investor in the company that.
At Craig Hallum at this time.
Congratulations first of all to to the company.
Restructuring of of getting our management and the board.
Finally, potentially are aligned with shareholder.
Best interests, which from watching from 30000 feet has been no small task over the years.
With that being said Oh I know previously the company had hired.
Our investment banks to take a look at.
Potentially monetizing.
The company or portions of the company.
Just wondering you know are those individuals' still involved in that process is that process ended.
Are you looking at potentially.
Hiring somebody else to help with potential strategic alternatives or do we just see a path.
Whereas better alignment and focus at the top end with board support you know to grow a bigger more substantial company overtime.
Sure Hi, this is Dave bench, yes, so we announced a couple of quarters ago.
<unk> Cain brothers to look at strategic alternatives for the company. We continue that process as we speak and that process is a binary event. So if we have anything to talk about.
<unk> announced that publicly thank you.
And also from my side, there is very much a support from the board in all the initiatives to make sure that again, we are executing on all the plans that we laid forward in order to expand augment whatever is necessary for the company to gain efficiency.
And grow that.
Company internally to support our goals that I laid out in the previous quarter and again reiterated on this quarter.
Fabulous just one quick follow up in part of the strategic alternative work that was done you know, obviously, you're not going to make an announcement here today, but.
Has there been any work done on the substantial patent portfolio.
And you know what it's worth and if there are.
Other ways to potentially monetize that just besides is that part of the strategic alternatives as well I guess I just wasn't clear with those announcements previously cable.
So absolutely. Thanks for that question so as deep a numerous times you know again I mentioned in the previous quarter and I'm sure. The team previous to me you have mentioned that we have a very rich portfolio of products as my first initiative. Some of the things that we did we sat here with the team.
We have patent attorney onboard.
And we divided it into stores.
Yields as well as a.
<unk>.
Combination of both what we look at on from a scientific perspective behalf.
And educational segment that people in terms of our R&D team common educate their marketing team then we scour the market for it whether it be our protect English will be shields.
There we are again, ensuring that we are not patents are not being infringed, which would be sort and to that end. We continue to protect the entire portfolio as part of our ongoing plans are absolutely. We continue to protect our patents that we have.
And if there are opportunistic events that would enable us to take advantage of those we would absolutely look after it may have a treasured.
Chest of patents and we look at it and we care for it and we make sure that again, it's protected and we are protecting the company to that Ed.
Yes, remember we have over 475 patents and the 40 year history of the company.
Succeeded in getting over $1 billion, we're supportive of licensing revenue from that so.
So.
<unk> is obviously germain and important to our company. Thank you and again just just as an additional comment then I think this is good for folks on the phone to here.
Again, you hear from my various in last couple of quarters that company has a lot of assets in it.
It's a.
I've mentioned it before its best kept secret.
The company in the diagnostics arena because there are this treasure chest that we look into and we are going systematically as a management team looking at all aspects of it and educate imagine.
The company has.
Various sites to it in terms of life Sciences, there's a patent portfolio. There is diagnostics, there's clinical lab. So systematically we're going through it and ensuring that we're leveraging all of the assets of the company as best as we can.
Again that was a great question. Thank you.
Thank you. Our next question comes from Kenan Lucas with Harbert Management Corporation. Please proceed with your question.
Thank you Hey, I mean.
Can you talk a little bit about your kind of trajectory for the life Sciences. Both in terms of given the significant growth you saw this quarter, where you want that to grow kind of pre commercialization of gen flux in terms of revenue and margins.
Yes, so ed.
So again.
Life Sciences products as I've mentioned, the idea would be expanding our geographic geographical footprint in the areas that we don't have very good coverage such as Asia Pac.
We hardly have sales in Latin America, we do have distributors, we are thinking about again, ensuring that we are appropriately.
Our position in those segments and markets.
Some of the areas that we have a full portfolio of products is for example in immunohistochemistry ish product I did mention a product doing my talk today, which is loop RNA either again, some areas that has very much a potential and a compared.
<unk> advantage over our competitors that we could significantly.
Expand and position ourselves in the market as a leading <unk>.
Life Science products provider. Another area is leveraging our life sciences in point of care solution. This is bringing testing closer to the patient, but again keen and the idea is to stay focused what gets us over the goal line and making sure that we are continue.
Hang on that trajectory of growth is our focused growth I mentioned this a number of times during our during my talk.
Uh huh.
Although there are many treasure trove, then treasure chest within the company you have to stay focused we've identified two areas within that aside.
Aside from geographical expansion, which is immunohistochemistry as loss point of care, which we're going to leverage and grow.
I expect revenues and margins margins are going to continue stay stay healthy.
In the range that they have been we are optimizing as far as thats concerned or number of RP O dollars are continuing to grow and revenues steadily growth again without making too much forward statements steady growth wins, the game and I believe we could deliver quarter after quarter.
Hi.
Thank you quena and for the question.
Thanks, Amit.
The go test me now and kind of expanding that to S. T D and I guess potentially other offerings.
Are there any sort of.
Other areas to other ways to kind of grow your reach there on the.
Partnership front or anything it's kind of similar to that go test me now offering.
Absolutely absolutely go test me now again, if you look at the market right now without mentioning many names of.
Institution that are focused in that area.
As you could see getting closer to the patient and patients being able to take care of their own health care and laboratory testing is that trend moving forward.
Reached out to a <unk>.
Couple of institutions that this is their.
Wheelhouse in terms of being able to grow this platform, we want to focus in an area that is our strength, which is laboratory testing. However, we have this platform that in partnership with others that can do excellent marketing and excellent expand expansion of this area.
We could leverage their strength in what we do to continue to grow. Additionally, again Enzo sits in a unique position where we have.
We are in a very desirable demographic market too.
To be able to really expand this direct to consumer platform. This is phase one of what we plan to continue to execute which enables folks to do testing at their own home. This is very much within our plan B plan to execute.
On what we do best which is laboratory testing and providing services and partner and expanding this channel.
Great. Thank you.
Thank you.
Thank you. Our next question comes from Dan Weston with Westcap Management. Please proceed with your question.
Yes, hi, good afternoon, everyone and congratulations on the quarter.
The life Sciences revenue was surprisingly good.
Mentioned.
In the press release.
Some language around a large bulk order during the quarter.
Can you quantify that or provide any context around that please.
Yes. So our 10-Q is coming out later Tonight and you will have all that information within the 10-Q, we don't give an actual customer information, but what I can do to give you a little bit of color is based on having a GMP facility, we're able to take larger orders in and certain customers who might not have previously worked with us.
We will work with us based on their GMP capabilities.
Thanks, David.
Looking out without providing any real guide.
Guidance, just generally speaking.
Would you consider this large bulk order can be a one off or would that be kind of a normal type of business going forward.
So those orders take a little bit more time too.
To generate and.
They are absolutely not one off but they do take a while and they are lumpy at the beginning.
But as we generate more and more of those larger orders and Youll see based on our average product order value size. We've already done some good work on the mountainside, we shall continue to do that over the coming quarters and years.
But again I wouldn't see a repeat necessarily next quarter and a big order like that but you will see it going forward now but.
We've established that thank you.
No I appreciate it Dave and lastly, just in your wheelhouse again.
Getting a little clarity on the cost savings initiatives Youre outlined today.
Looking at this calendar year, 'twenty, two and the $5 million that you're projecting.
Should we should we view the $5 million reduction off of a base of your Q2 quarter on a non-GAAP basis and expenses.
No because this is an annualized number that we're that we're going to have by the end of the year. So you can't use that number and say okay based on what we just had what should it be annualized it will be reflected by the end of the year and that should help us remember of course, we're positioned for growth. So there's going to be other areas.
That we're going to grow in while we are cutting costs in.
Certain areas that we know we can count those costs. So it's kind of like a give and take a little bit.
Mhm.
Okay that was all I had for now I appreciate it.
Absolutely. Thank you.
Thank you there are no further questions at this time I'd like to turn the floor back over to Amit our Fannie for any closing comments.
Okay.
Thank you so much for joining with us joining us today.
Extremely proud of the team's achievements growth and profitability achieved in this year, we remain committed to generating value for our shareholder and look forward to discussing further progress with you on our Q3 report and call in mid June .
Yes.
Overall again this was a very dynamic.
And from my perspective.
This is not part of my prepared statement, but I want to share. This with you that I very much welcome the opportunity to have this dialogue with our shareholders as the David you have very much confidence in the growth of the company and what we are trying to accomplish year. So by all means again, we appreciate your support.
Port and we work hard for you and thank you for this opportunity.
Operator.
This concludes today's conference you may disconnect your lines at this time. Thank you for your participation.
Okay.
Okay.
Okay.
Okay.
Okay.
Okay.
Okay.
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