Q3 2022 LogicMark Inc Earnings Call
I would now like to turn the call over to Louie Toma from core IR, the company's Investor relations firm.
Good afternoon, and thank you for participating in today's conference call.
Some logic market leadership team Schein.
Chief Executive Officer, and Mark Archer, Chief Financial Officer.
During this call management will be making forward looking statements, including.
You can see the dress logic market expectations for future performance or operational results and anticipated product launches.
Forward looking statements involve risks and other factors that may cause.
Actual results to differ materially.
And those statements.
More information about these risks please refer to the risk factors described in lots of <unk>. Most recently filed annual report on Form 10-K, and subsequent periodic reports filed with the SEC and logic March press release that accompanies this call, particularly the cautionary statements.
The content of this call.
Accurate.
As of today November 10th 2022.
Except as required by law logic, Mark disclaims any obligation to publicly update or revise any information to reflect events or circumstances.
That occur after this call.
My pleasure to turn the call over to the company's CEO Shar recently.
Thank you Louis.
Welcome everyone and thanks for joining us.
I am pleased to report that we achieved another strong quarter of solid revenue growth of 16% in Q3, and 28% year to date with higher gross profits and increased gross margin as we continue to execute our cost initiatives and product development operation intellectual property.
Extension.
And marketing.
Notably revenue increases were driven by improvements in sales to VA hospitals and clinics.
You may recall, we are an approved GSA vendor and can generate additional governmental related business.
Federal state and local agency levels.
Mr Mok Wow, as we rollout new products and services.
Coming quarters and position us to grow our market share as a leading provider of <unk> solutions and services amongst bandon care economy.
Logic will continues its exciting transformation into a purpose driven technology company focused on building solutions for the common carrier economy.
We have embarked on a journey to invigorate logic, mark with the talent and resources required to position the company for consistent.
In July we launched our direct to consumer sales channel and enhanced our corporate website e-commerce portal, enabling direct purchases.
This exciting new channel enables us to achieve stronger connections with our end customers, allowing us to be more involved in the sales process.
This drives our ability to cross sell value added products and accessories.
Impacting our revenue growth and margin.
Currently the website include several products for sale.
Leading our guardian alerts and feed them alert models as well as various related to factory.
Whats the development of new products and services, we will leverage these capabilities to diversify our sales mix and revenue streams.
We also continue investing in our product and marketing infrastructure.
The addition of two key team members, John Federico joining us as senior director product.
Sarah Hunter, joining us as our senior Vice President of marketing.
Our R&D and product development teams are hard at work we.
We believe the results they are producing will be transformational as we grow our foothold and expand our market share.
We are very excited about our for our anticipated new product launches beginning with our first software App to Astro X plus one next month.
<unk> is a new mobile app and the first and largest mark Asterix ecosystem Smart conducted personal emergency response systems purse.
Key features include one button connection to emergency services, your friends and family or dose.
Our pin that not only protects our count, but stocks or call for help from being canceled by anyone but you.
Our scheduling systems due to your online calendar that automatically alert your emergency contact if you don't chicken after a scheduled appointment.
Okay.
This feature is unique to Astro Xbox one.
It makes it faster and easier to set up your schedule checking and automatic emergency contacts.
So I really just think once calendar to the App is an example of the Companys customer centric design approach to technology.
Something that has been historically backing in the Perth market.
Our mission of logic, Mark is to protect personal experience of living life to the fullest.
We plan to follow the release of constructs with one with our first Wi Fi enabled product the freedom alert plus shortly and a non factor.
We've also made great strides in expanding our intellectual property filing of additional patents.
For our innovations and solutions.
Paul Chew final patent applications focused on various uses of devices in Q3, including Wearables such as Paris.
Kevin many wellness and related functions.
Additionally, we will be filing a final application from our April 2022, provisional application covering the use of sensors and devices in a wider context of deployment into Q4.
We felt the traditional application at September 30th that include various techniques that can ensure the quality of wellness care systems on delivery and we will be filing a further provisional in November 2022.
Corporates, various machine learning and AI techniques and systems and such.
Sort of wellness in multiparty interactions.
Yes.
We are steadfast in our commitment to delivering on the promises we've made to our shareholders.
Form logic, Mark through improved financial performance operational.
Excellence in what we believe a market leading solution that will diversify our revenue generation and continue to enhance shareholder value.
I'm heartened by our progress since joining the company in June of last year and resolute in my passionate commitment to position <unk> for success.
I'm more confident as we continue to proceed towards accomplishing our objectives.
Stablish a longer track record of success.
I'll now pause and ask Mike Archer to discuss our third quarter financial results.
And then I'll return to provide some closing remarks.
Thank you Sharon.
Here are the financial results for the third quarter ended September 32022.
Revenue for the third quarter was $2 8 million.
Up 15% over the year ago period.
Revenue increases were driven by improvements in sales.
Hospitals and clinics.
Gross profit was $1 7 million for the three months ended September 32022.
Up 51%.
Compared to the same period last year.
Gross margin increased from 47% to.
The 62%.
For this quarter ended September 32022, compared to the same period last year.
Direct operating costs in the third quarter were 346000 <unk>.
Creasing, 51% over the year ago period.
Driven by higher sales.
And the initiation of online advertising to support the July 2022 launch in the company's new direct to consumer E Commerce website.
Selling expenses in the third quarter.
Increased to 333000.
Up from 75000 from the same period.
In the prior year.
Due to the addition of new personnel.
Higher sales commissions paid on the increase in sales.
Increased marketing costs for the third quarter were due to the addition of new personnel.
As well as the addition of Investor Relations public relations and <unk>.
Social media support organizations.
Research and development spending.
Increased to 375000 in the third quarter of 2022.
From 137000 in the same period last year.
That's a direct result of all of our new product development activity.
General and administrative expense.
Was 20, I'm, sorry, $2 6 million in the third quarter of 2022 up from $1 million in the year ago period.
The increase in G&A costs was due to higher insurance costs.
We're consulting fees.
Increased spending in the accounting and finance here at.
And higher costs related to being a public company.
Specifically the cost associated with the proxy solicitation process.
For our just completed August annual General meeting.
Net loss applicable to common shareholders in the third quarter was $2 2 million.
<unk> 23 per share.
Versus 724000 or <unk>.
<unk> per share in the prior year period.
We closed the quarter on September 30, with $9 $3 million of cash in the bank.
Versus $12 million.
At the end of last year.
I'll now turn the call back over to <unk> for some final.
Comments.
Thanks Mark.
As you wrap up the call I wanted to leave you with a couple of key thoughts.
As I mentioned in our last call. We are currently in the midst of a silver tsunami.
10000, Baby Boomers, turning 65 daily.
And the demand for technology that supports the colon cancer economy continues to increase rapidly.
That's a CAGR of the total aging in place market at 13% and a total care economy that is about 25 billion.
Research has shown that 90% of people over 50 want to age in place.
Strong demand for years to come.
We are working hard to innovate solutions that enable loved one.
But in their home.
Ensuring that they are being properly monitored and appropriately cared for.
We watch it much beyond excited about this opportunity and continue to work tirelessly to provide new innovation innovative solutions.
This evolving care economy.
Look forward to updating you with new announcements as it progressed with these initiatives.
At this time I will open the call to questions operator.
Thank you if you would like to ask a question. Please press star followed by the number one on your telephone keypad.
Your question. Please press Star one again, we'll pause for just a moment to compile the Q&A roster.
Yes.
Yeah.
And once again, if you'd like to ask a question. Please press star followed by the number one on your telephone keypad.
I have no questions in queue, I will turn the call back over to Charlotte Simmons for closing remarks.
I want to thank all of you who participated in our call today I look forward to continuing to provide updates on our progress at the appropriate times. Thank you so much.
This concludes today's conference call. Thank you for your participation you may now disconnect.
[music].
[music].
[music].
I would now like to turn the call over to Louie Toma from core IR, the company's Investor relations firm.
Good afternoon, and thank you for participating in today's conference call.
Margin leadership team Schein once a month.
Chief Executive Officer, and Mark <unk>, Chief Financial Officer.
During this call management will be making forward looking statements, including statements that address logic market expectations for future performance or operational results and anticipated product launches.
Forward looking statements involve risks and other factors that may cause actual results to differ materially from those.
Statements.
More information about these risks please refer to the risk factors described in March March most recently filed.
The report on Form 10-K, and subsequent periodic reports filed with the SEC and logic March press release that accompanies this call, particularly the cautionary statements.
The content of this call.
Options this information.
Only as of today November 10 2022.
As required by law logic, Mark disclaims any obligation to publicly update or revise any information to reflect events or circumstances that occur. After this call.
Is that my pleasure to turn the call over to the company's CEO Shar recently.
Thank you Marie.
Welcome everyone and thanks for joining us.
I am pleased to report that we achieved another strong quarter of solid revenue growth.
A 15% in Q3, and 28% year to date, but higher gross profits.
Gross margin as we continue to execute our cost initiatives and product development operation.
Actual property expansion.
And marketing.
Notably that the increases were driven by improvements in sales to VA hospitals and clinics.
You May recall, we are an approved GSA thunder and can generate additional governmental related business at the federal state and local agency levels.
Mr Mark Wow.
Rollout of new products and services.
Waters and position us to grow our market share leading provider first solution.
Among expanding care economy.
Logic continues its exciting transformation into a purpose driven technology company.
Just on building solutions for the common carrier economy.
We have embarked on a journey to invigorate logic, mark with the talent and resources required to position the company for consistent.
In July we launched our direct to consumer sales channel and enhanced our corporate website e-commerce portal, enabling Tibet purchases.
This exciting new channel enables us to achieve stronger connections with our end customers, allowing us to be more involved in the sales process.
This drives our ability to cross sell value added products and accessories.
Particularly impacting our revenue growth and margin.
Currently the what's that include several products for sale, including our Guardian alerts and freedom alert models as well as various for later to factories.
Once the development of new products and services, we will leverage these capabilities to diversify our sales mix and revenue streams.
We also continue investing in our product and marketing infrastructure with the addition of two key team members John Federico joining us as senior director product.
Thank you have a hunter joining us as our senior Vice president of marketing.
Our R&D and product development teams are hard at work.
We believe the results they are producing will be transformational as we grow our foothold and expand our market share.
We are very excited about us for our anticipated new product launches beginning with our first software App to Astro X plus one next month.
As Rex Quest, one is our new mobile app.
The first and largest Astro ecosystem smart conducted personal emergency response systems purse.
Key features include one button connection to emergency services, your friends and family or dose.
Our pens on not only protects our count but stopped your call for help from being canceled by anyone but you.
Our scheduling systems due to your online calendar that automatically alert yard Mark Minsky contact if you don't chicken after a scheduled appointment.
Okay.
This feature is unique to Astro Xbox one.
It makes it faster and easier to set up your schedule checking and automatic emergency contacts.
So it's really just think once calendar to the App is an example of the Companys customer centric design approach to technology and people.
That has been historically backing in the Paris market.
Our mission of logic, Mark is to protect the personal experience of living life to the fullest.
We plan to follow the release of abstracts with one with our first Wi Fi enabled product the freedom alert.
Shortly and a one factor.
We've also made great strides in expanding our intellectual property filing of additional patents.
Our innovations and solutions.
Two final patent applications focused on various uses of devices in Q3, including Wearables such as the <unk>.
Covering many wellness and related functions.
Additionally, we will be filing our final application from our April 2022 professional application covering the use of sensors and devices in a wider context of deployment into Q4.
We filed the traditional application at September 30th that includes various techniques that can ensure the quality of wellness care systems from delivery and we will be filing a further traditional in November 2022 that incorporates various machine learning and AI techniques.
In support of wellness and multiparty interactions.
Yes.
We are steadfast in our commitment to delivering on the promises we've made to our shareholders.
Form logic, Mark to improve financial performance operational excellence and what we believe a market leading solution.
Despite our revenue generation.
<unk> enhanced shareholder value.
I'm heartened by our progress since joining the company in June of last year, and then Russell.
Passionate commitment to position <unk> for success.
I'm more confident that the we continue to proceed towards accomplishing our objectives.
Established a longer track record of success.
I'll now pause and ask Mike Archer to discuss our third quarter financial results and then I'll return to provide some closing remarks.
Thank you Shannon.
Here are the financial results for the third quarter ended September 32022.
Revenue for the third quarter.
$2 8 million.
Up 15% over the year ago period.
Revenue increases were driven by improvements in sales.
VA hospitals and clinics.
Gross profit was $1 7 million for the three months ended September 32022.
Up 51%.
Compared to the same period last year.
Gross margin increased from 47%.
62%.
For this quarter ended September 32022, compared to the same period last year.
Direct operating costs in the third quarter were 346000, increasing 51% over the year ago period.
Driven by higher sales.
The initiation of online advertising to support that July 2022 launch in the company's new direct to consumer E Commerce website.
Selling expenses in the third quarter.
Increased to 333000.
Up from 75000 from the same period in <unk>.
In the prior year.
Due to the addition of new personnel and higher sales commissions paid on the increase in sales.
Increased marketing costs for the third quarter.
Due to the addition of new personnel as well as the addition of Investor Relations.
Click relations and social media support organizations.
Research and development spending increased to 375000 in the third quarter of 2022.
137000 in the same period last year.
As a direct result of all of our new product development activity.
And general and administrative expense.
Was 20, I'm, sorry, $2 6 million in the third quarter of 2022 up from $1 million in the year ago period.
The increase in G&A costs was due to higher insurance costs.
Higher consulting fees.
Increased spending in the accounting and finance area.
And higher costs related to being a public company.
Specifically the cost associated with the proxy solicitation process.
For our just completed August annual General meeting.
Net loss applicable to common shareholders in the third quarter was $2 2 million or.
<unk> 23 per share.
Versus 724000, or <unk> 12 per share in the prior year period.
We closed the quarter on September 30, with $9 $3 million of cash in the bank.
Versus $12 million.
At the end of last year.
I'll now turn the call back over to <unk> for some final.
Comments.
Thanks Mark.
As we wrap up the call I want to leave you with a couple of key docs.
As I mentioned in our last call. We are currently in the midst of a silver tsunami.
10000, Baby Boomers, turning 65 daily.
So the demand for technology that supports the equivalent to our economy continues to increase rapidly.
That's quite a taker of the total aging in place market at 13% and a total car economy that is about 25 billion.
Researchers found that 90% of people over 50 want to age in place setting the stage for strong demand for years to come.
We are working hard to innovate solutions that enable loved one.
But in the home.
Ensuring that they have been properly monitored and appropriate to cancel out.
We watch it Mark are beyond excited about this opportunity and continue to work tirelessly to provide new innovative solutions.
Justice evolving care economy.
We look forward to updating you with new announcements as it progressed with depot initiatives at.
At this time I will open the call to questions operator.
Thank you if you would like to ask a question. Please press star followed by the number one on your telephone keypad.
Your question. Please press Star one again, we'll pause for just a moment to compile the Q&A roster.
Yes.
Okay.
Yes.
And once again, if you would like to ask a question. Please press star followed by the number one on your telephone keypad.
I have no questions in queue, I will turn the call back over to Charlotte Simmons for closing remarks.
I wanted to thank all of you who participated in our call today I look forward to continuing to provide updates on our progress at the appropriate times. Thank you so much.
This concludes today's conference call. Thank you for your participation you may now disconnect.