Q4 2024 Biofrontera Inc Earnings Call
Operator: Good morning, and welcome to the Biofrontera 4th Quarter and Fiscal 2024 Financial Results and Business Update Conference Call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero.
Good morning, and welcome to the bio frontier, our fourth quarter and fiscal 'twenty 'twenty four financial results and business update conference call.
All participants will be in listen only mode.
Should you need assistance. Please signal a conference specialist by pressing the star key followed by zero.
Operator: After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then 1 on your telephone keypad. draw your question, please press star then 2.
After today's presentation there'll be an opportunity to ask questions to ask a question you May Press Star then one on your telephone keypad to withdraw your question. Please press Star then two.
Operator: Please note, this event is being recorded.
Please note this event is being recorded.
Andrew Barwicki: I would now like to turn the conference over to Andrew Barwicki, Investor Relations Representative. Please go ahead. Thank you.
Speaker Change: I would now like to turn the conference over to Andrew Bar Wiki Investor Relations Representative. Please go ahead.
Andrew Barwicki: Good morning and welcome to Biofrontera Incorporated's fourth quarter and fiscal year 2024 financial results and business update conference. Actual results may differ materially, please note that certain information discussed during today's call by management is covered under the safe harbor provisions of the Private Securities Litigation Reform Act. We caution listeners that Biofrontera's management will be making forward-looking statements and that actual results may differ materially from those stated or implied by these forward-looking statements due to risks and uncertainties associated with the company's business. All risks and uncertainties are detailed in and are qualified by the cautionary statements contained in Biofrontera's press releases and SEC filings.
Speaker Change: Thank you good morning, and welcome to buy a frontier incorporated fourth quarter and fiscal year 2024 financial results and business update conference call.
Speaker Change: Actual results may differ materially. Please note that certain information discussed during today's call by management is covered under the safe Harbor provisions of the private Securities Litigation Reform Act, we caution listeners the buyer from terrorist management will be making forward looking statements and that actual results may differ materially from those stated or implied by these forward looking statements.
Speaker Change: Due to risks and uncertainties associated with the company's business.
Speaker Change: All risks and uncertainties are detailed in and are qualified by the cautionary statements contained in Biopharma terrorists press releases and SEC filings also this conference call contains time sensitive information that is accurate only as of the date of this live broadcast March 21 2025.
Andrew Barwicki: Also, this conference call contains time-sensitive information that is accurate only as of the date of this live broadcast, March 21st, 2025. Biofrontera undertakes no obligation to revise or update any forward-looking statements to reflect events or circumstances after the date of this conference call, except as required by law.
Speaker Change: <unk> undertakes no obligation to revise or update any forward looking statements to reflect events or circumstances. After the date of this conference call, except as required by law.
Andrew Barwicki: During today's call, there will be references to certain non-GAAP financial measures. Biofrontera believes these measures provide useful information for investors, yet should not be considered as a substitute for GAAP, nor should they be viewed as a substitute for operating results determined in accordance with GAAP. A reconciliation of non-GAAP-to-GAAP results is included in the press release we issued earlier today. More specifically, management will be referencing adjusted EBITDA, a non-GAAP financial measure defined as net income or loss excluding interest income and expenses, income taxes, depreciation and amortization, and certain other non-recurring or non-cash-out measures.
Speaker Change: During today's call there'll be references to certain non-GAAP financial measures by a friend Terra believes these measures provide useful information for investors you should not be considered as a substitute for GAAP, nor should they be viewed as a substitute for operating results determined in accordance with GAAP.
Speaker Change: A reconciliation of non-GAAP to GAAP results is included in the press release, we issued earlier today more specifically management will be referencing adjusted EBITDA, a non-GAAP financial measure defined as net income or loss, excluding interest income and expenses income taxes, depreciation and amortization and certain other non current.
Non recurring or non cash items with that said I would like to turn the call over to Hermann Zubair, CEO, Chairman and founder by a friend's house Herman.
Hermann Luebbert: With that said, I would like to turn the call over to Hermann Luebbert, CEO, Chairman, and founder of Biofrontera. Yeah. Thank you, Emil. And my thanks to everyone joining up this morning.
Hermann Zubair: Yes, Thank you Randall.
Hermann Zubair: My thanks to everyone joining us this morning.
Hermann Luebbert: On today's call, I'll provide an overview of our accomplishments throughout 2024 and how our initiatives and execution have resulted in a record sales year.
Hermann Zubair: On today's call I'll provide an overview.
Hermann Zubair: Tishman School, it's 'twenty 'twenty, four and hold all of our initiatives and execution have resulted in our records.
Hermann Luebbert: Fred Leffler, our CFO, will follow with a discussion on financial results, and then both of us will be available to answer questions after our prepared remarks. I am pleased with $37.3 million in sales in 2024. This represents an annual sales growth of 18.5% for Q4 and almost 10% for the entire year and is a record for our company.
Hermann Zubair: So, let's let's love our CFO will follow with a discussion on financial results and then both of US will be available to answer questions. After our prepared remarks.
I am pleased with $37 million in sales in 2024. This represents an annual sales growth of 18, 5% for Q4, and almost 10% for the entire year and just for our company.
Hermann Luebbert: We strongly believe our past investments, business plan and execution will allow us to achieve another record year in 2025. The year included some further milestones that we are very pleased with. First and foremost, we placed 52 Rodolat XL lamps in the first quarter, fourth quarter alone, and 100 between the launch in June 2024 and the end of 2024. Providing a larger PDT lamp to our customers is an important milestone in our overall strategy to extend the use of Amelus PDT for treating mild to moderate actinic keratosis on the face and scalp and potentially further indications of the future that are currently in development.
Hermann Zubair: We strongly believe our past investments business plan and execution will allow us to achieve another one like that you got in 2025.
Hermann Zubair: The year included some further milestones, but we are very pleased with.
Hermann Zubair: First and foremost we placed 52, well do not extra labs, and the first Florida fourth quarter alone and Han books between the launch in June 2024 at the end of 'twenty and default.
Hermann Zubair: <unk>, a larger PDT lamp to all customers is an important milestone in our overall strategy to extend the use of loose PDT for pleading multi modal with actinic keratosis on the phased in skirt and potentially further indications of the future that are currently in development.
Hermann Luebbert: The state-of-the-art red light emitting LED lamp is designed to revolutionize the photodynamic therapy of actinic keratosis aimed at enhancing the ease of use for healthcare providers by being highly maneuverable and capable of accommodating various patient treatment positions. It provides clinicians with the ability to illuminate a larger treatment area in a single session, which is particularly advantageous for treating extensive fields with multiple actinic keratosis lesions. Second, we obtained FDA approval to use up to three tubes of amylose per treatment. AMELUS, a photosensitizing agent and porphyrin precursor, is FDA approved for use in combination with both Rhodolat LAMP models and for lesion-directed and field-directed treatment of actinic keratosis of mild to moderate severity on the face and skull.
Hermann Zubair: The state will see I'll, let light emitting Leds.
Hermann Zubair: It's designed so the evolution of notice the photodynamic therapy of actinic keratosis aimed at enhancing the ease of use what else couple behind us by being highly maneuverable and capable of accommodating values patient Cleveland positions.
It provides clinicians with the ability to illuminate the largest treatment.
Hermann Zubair: Single session, which.
Hermann Zubair: Which is particularly advantageous for pleading extensive field with multiple actinic keratosis lesions.
Hermann Zubair: Second we obtained FDA approval to use up to three tubes of loose per treatment.
Hermann Zubair: Or lose a party sensitizing agent and porcelain Picasso.
Hermann Zubair: It's FDA approved for use in combination with both whole donuts models.
Hermann Zubair: Salesian directed <unk> directed treatment of our clinical doses of March to muddle severity on the phase I'm Scott <unk>.
Hermann Luebbert: Treating larger fields is a second milestone in our overall strategy and complements the availability of a larger lab.
Hermann Zubair: Pleading larger peers, it's a second milestone in our overall strategy and complements the availability of a larger lamp.
Hermann Luebbert: Third, we achieved significant results in a phase three study of Hermann Luebbert's photodynamic therapy regarding the treatment of superficial basal cell carcinoma. We believe AMELU has additional applications other than actinic keratosis, and we are committed to explore these opportunities. I can tell you that being able to treat actinic eratosis, which are precancerous lesions that may progress to squamous cell carcinoma, is a wonderful thing. But to expand beyond that to treating non-melanoma skin tumors is very encouraging and exciting for all of us at Biofrontera. We expect to submit the new data to the FDA in the second half of this year.
Hermann Zubair: Third we achieved significant results in the phase III study of I'm, a lose photodynamic therapy.
Hermann Zubair: Regarding the treatment of superficial basal cell carcinoma.
Hermann Zubair: We believe AMR lose us additional applications other than up to Nicola towards this and we are committed to explore these opportunities.
Hermann Zubair: I can tell you without being able to treat actinic, keratosis, which a precancerous lesions that maple squamous cell carcinoma.
Hermann Zubair: The wonderful thing, but to expand beyond that to treating non melanoma skin two months, it's about really kind of a gene and exciting for all of upset by iPhone Taylor, we expect to submit the new data to the FDA in the second half of this year.
Hermann Luebbert: Additionally, early in 2024, we successfully negotiated the restructuring of agreements with our former parent company, Biofrontera AG, resulting in the transfer price of amelus being reduced from 50% to 25% for all purchases in 2024 and 2025. I strongly believe this was accomplished through the demonstration of our strong commitment towards promoting PDT in the USA and exploring the many open opportunities of this wonderful therapy. As part of the renegotiated agreements, we took control of all clinical trials with AMELUS in the USA. This allows us to speed up patient recruitment and the corresponding label expansions with the FDA.
Hermann Zubair: Additionally, early in 2024.
Hermann Zubair: We successfully negotiated a restructuring of agreements with our former parent company by offering a Qi <unk>.
Hermann Zubair: The other thing is the transfer of I'm, a loose being reduced from 50% to 25% for all purchases in 'twenty four and 'twenty five.
Hermann Zubair: I strongly believe this was accomplished through the demonstration of a strong commitment towards promoting P. D T in the USA and.
Hermann Zubair: And exploring the menu open opportunities of this wonderful therapy.
Hermann Zubair: As part of the lead negotiated agreements, we took control of all clinical trials with loose in the USA.
Hermann Zubair: This allows us to speed of patient recruitment and the corresponding label expansions with the FDA.
Hermann Luebbert: Just recently, we announced the recruitment of the final patient in our phase 3 study for mild to moderate actinic keratosis on the trunk, neck, and extremities. The goal is to extend our current label, which is restricted to treatments of AK on the face and scalp, to the entire body. This represents another important cornerstone in our overall strategy complementing the use of three tubes and the availability of the larger lamp. As a last building block for this label extension, FDA has requested a phase one pharmacokinetic study with 16 patients, which started in January and is currently recording.
Hermann Zubair: Just recently, we announced the recruitment of the final patient in our phase III study for mild to moderate actinic keratosis on the tongue snack and extremities.
Hermann Zubair: <unk> is to extend or colon labor, but it just looks like the two treatments of 8-K on the face and scope to the entire body.
Hermann Zubair: This represents another important cornerstone and overall strategy complementing the use of <unk> and the availability of the launch on that.
Hermann Zubair: As the last building block for this label extension F. D. A hopefully commenced the phase one pharmacokinetic study the 16 patients which started in January and is currently recording.
Hermann Luebbert: more long-term We are aiming at getting AMELUS approved for the treatment of moderate to severe acne. Our ongoing Phase II study in this indication is close to completing patient recruitment. The further development plan will be discussed with the FDA once the data of this study become available. Based on our recent successes, our continued improvements of salesforce effectiveness, positive customer feedback, and the heightened level of customer engagement, we are excited about how 2025 is shaping up for the company.
Hermann Zubair: More long term.
Hermann Zubair: We are aiming at getting them the loose approved for the treatment of moderate to severe acne.
Hermann Zubair: Our ongoing phase two study in this indication is close to completing patient recruitment.
Hermann Zubair: The development plan will be discussed with the FDA once the data off the study would become available.
Hermann Zubair: Based on our recent successes our continued improvements of sales force effectiveness positive customer feedback and the heightened level of customer engagement.
Speaker Change: Sighted about how old 'twenty to 'twenty five is shaping up for the company.
Fred Leffler: With that, I'll turn the call over to Fred to walk through the financial details of the fourth quarter and full year. Fred?
Hermann Zubair: With that I'll turn.
Hermann Zubair: Nicole over to Fletcher to book walk through the financial details of the fourth quarter and full year, but.
Fred Leffler: Thank you, Hermann. It's my pleasure to be here today and provide you an overview of our 2024 financial performance. I'll start off with the fourth quarter 2024 results. Total revenues for the fourth quarter of 2024 were $12.6 million, an increase of $2.0 million, or 18.5%, compared with the $10.6 million in revenue for the fourth quarter of 2023. This growth reflects the continued adoption of amylose, the launch of the Roto XL lamps, and a price increase in Q4 of 2024. Total operating expenses were $14.3 million for the fourth quarter of 2024, compared with $14.5 million for the fourth quarter of 2023.
Speaker Change: Thank you Herman and <unk>.
Hermann Zubair: Pleasure to be here today and provide you an overview.
Speaker Change: Of our 2024 financial performance.
Speaker Change: First off with the fourth quarter of 2024 result.
Speaker Change: Total revenues for the fourth quarter of 2024 were $12 6 million, an increase of 2.0 million or 18, 5% compared with the $10 $6 million in revenue for the fourth quarter of 2023.
Speaker Change: Growth reflects the continued adoption of amyloid.
Speaker Change: Launch of the Roto <unk> XL lamp and a price increase in Q4 of 2024.
Speaker Change: Total operating expenses were $14 3 million for the fourth quarter of 2024, compared with $14 5 million for the fourth quarter of 2023.
Fred Leffler: Cost of revenues was $5.3 million for the fourth quarter of 2024 compared with $5.4 million for the prior year quarter. This reflects the lower transfer pricing Hermann mentioned a moment ago. selling general and administrative expenses were $8.2 million for the fourth quarter of 2024, compared with $9.1 million for the fourth quarter of 2023. The net loss for the fourth quarter of 2024 was $1.4 million, or $0.19 per share, versus a net income of $3.5 million, or $1.65 per share for the prior year quarter, with all share figures on a split-adjusted basis. the change. was driven by a gain from a legal settlement recognized in Q4 of 2023.
Speaker Change: Revenue was $5 3 million for the fourth quarter of 2024, compared with $5 4 million for the prior year quarter. This reflects the lower transfer pricing Herman mentioned a moment ago.
Speaker Change: Selling general and administrative expenses were $8 2 million for the fourth quarter of 2024, compared with $9 1 million for the fourth quarter of 2023.
Speaker Change: The net loss for the fourth quarter of 2024 was $1 4 million or <unk> 19 per share versus a net income of $3 5 million or $1 65 per share for the prior year quarter with all share figures on a split adjusted basis.
Speaker Change: This change was.
Speaker Change: It was driven by a gain from a legal settlement recognized in Q4 of 2023.
Fred Leffler: Adjusted EBITDA for the fourth quarter of 2024 was negative $1.4 million compared with negative $3.2 million for the fourth quarter of 2023, reflecting higher revenues partially offset by increased SG&A costs.
Speaker Change: Adjusted EBITDA for the fourth quarter of 2024 was negative $1 4 million compared with negative $3 2 million for the fourth quarter of 2023, reflecting higher revenues, partially offset by increased SG&A costs.
Fred Leffler: Adjusted EBITDA, a non-GAAP financial measure, is defined as net income or loss excluding interest income, expenses, income taxes, depreciation and amortization, and certain other non-recurring or non-cash items. I'll refer you to the table in the press release we issued earlier today for a reconciliation.
Speaker Change: Adjusted EBITDA, a non-GAAP financial measure as defined is defined as net income or loss, excluding interest income expenses income taxes, depreciation and amortization and certain other nonrecurring or non cash items I'll refer you to the table in the press release, we issued earlier today for a reconciliation.
Fred Leffler: I will now summarize our full-year 2024 results. Total revenues for 2024 were $37.3 million compared with $34.1 million for 2023, an increase of approximately 9.5 percent, and was primarily driven by higher volume, a higher average selling price of AMELUVs, and the launch of the RotoLED XLWave. Total operating expenses were $54.5 million for 2024 compared with $56.7 million for 2023. Cost of revenues increased to $18.6 million for 2024 from $17.4 million in 2023. And this increase was due to sales, but offset by the lower transfer prices that impacted Q4 2024 cost of goods sold.
Speaker Change: I will now summarize our full year 2024 and resolved.
Speaker Change: Total revenues for 2024 were $37 3 million compared with $34 1 million for 2023.
Speaker Change: An increase of approximately nine 5% and was primarily driven by higher volume higher average selling price of bandwidth and the launch of the Roto <unk>.
Speaker Change: Total operating expenses were $54 5 million for 2024, compared with $56 7 million for 2023 cost of revenues increased to $18 6 million or 2024 from $17 4 million in 2023.
Speaker Change: And then yeah.
Speaker Change: The increase was due to sales, but offset by the lower transfer prices that impacted Q4.
Speaker Change: Q4, 'twenty 'twenty four cost of goods sold.
Fred Leffler: Selling General and Administrative Expenses for 2024. decreased $5.3 million, or 13.5% compared to 2023. This was primarily driven by a $3 million reduction in general administrative expenses. are primarily attributable to a decrease in external legal expenses and expenses related to financing activities. The decrease was further driven by more strategic investment of promotional spend, which resulted in savings in general sales and marketing of about $1.8 million.
Speaker Change: Selling general and administrative expenses for 2024.
Speaker Change: Decreased $5 3 million or 13, 5% compared to 2023. This was primarily driven by $3 million, a $3 million reduction in general and administrative expenses.
Speaker Change: Primarily attributable to a decrease in external legal expenses and expenses related to financing activities.
Speaker Change: The decrease was further driven by a more strategic investment of promotional spend.
Speaker Change: Which resulting resulted in savings in general sales and marketing.
Speaker Change: $1.8 million.
Fred Leffler: The net loss for 2024 was $17.8 million, or $3.22 per diluted share, compared with a net loss of $20.1 million, or $13.02 per share, for 2023. Adjusted EBITDA was negative $15.3 million for 2024, compared with negative $19.5 million for 2023. The decrease was primarily driven by an increase in gross profits due to the increased sales and the reduction in transfer prices. and a decrease in SG&A expenses.
Speaker Change: The net loss for 2024 was $17 8 million or $3 22 per diluted share compared with a net loss of $20 $1 million or $13 <unk> per share or <unk> 23, adjusted EBITDA was negative $15 3 million for 2024.
Speaker Change: Compared with negative $19 5 million for 2023. The decrease was primarily driven by an increase in gross profit due to the increased sales and the reduction and transfer price.
Speaker Change: And a decrease in SG&A expenses again, I'll refer you to the table in the news release earlier today for a reconciliation of GAAP to non-GAAP financial measures.
Fred Leffler: Again, I'll refer you to the table in the news release earlier today for a reconciliation of GAAP to non-GAAP financials.
Fred Leffler: Turning to our balance sheet, as of December 31st, 2024, we had cash and cash equivalents of $5.9 million, compared with $1.3 million as of December 31st, 2023. This is due to our strong growth and additional capital raised in the fourth quarter. Our inventory balance as of December 31st, 2024, was $6.6 million compared to $10.9 million on December 31st, 2023. we believe we've gotten our inventory level to an adequate level and expect inventory to be around, to maintain around this level. During the year ended December 31st, 2024, net cash provided by financing activities was $14.8 million, which consisted of proceeds of $7.7 million net of capitalized issuance costs from the issuance of preferred stock and warrants, $7.4 million from the exercise of warrants for preferred stock, plus $4.1 million net of issuance costs received from the issuance of convertible notes.
Speaker Change: Turning to our balance sheet as of December 31, 2024, we had cash and cash equivalents of $5 9 million compared with $1 3 million as of December 31, 2023.
Speaker Change: This is due to our strong growth and additional capital raised in the fourth quarter.
Speaker Change: Our inventory balance as of December 31st 2020 416.
Speaker Change: $6 6 million compared to $10 9 million.
Speaker Change: Or are on December 31, 2003.
Speaker Change: We believe we've gotten our inventory levels to an adequate adequate.
Speaker Change: Level and.
Speaker Change: We expect inventory it could be around doesn't maintain around that as well.
Speaker Change: During the year ended the <unk>.
Speaker Change: Number 31, 2024 net cash provided by financing activities was $14 8 million, which consisted of proceeds of $7 7 million net capitalized issuance costs from the issuance of preferred stock and warrants.
Speaker Change: $7 4 million from the exercise of warrants for preferred stock plus $4 1 million net of issuance costs received from.
Speaker Change: From the issuance of convertible note this was offset by repayments of.
Fred Leffler: This was offset by repayments of $4.3 million for our short-term debt.
Speaker Change: $4 3 million for our short term debt.
Hermann Luebbert: So, with that overview of our business and recent financial performance, Hermann and I are now ready to take questions from our covering analysts.
Speaker Change: So with that overview of our business and.
Speaker Change: Financial performance permanent I are now ready to take questions from our covering analysts.
Operator: Operator. We will now begin the question and answer session. To ask a question, you may press star then 1 on your telephone keypad. If you are using a speakerphone, please pick up your handset before pressing the key. To draw your question, please press star then 2. At this time, we will pause momentarily to assemble our roster.
Speaker Change: Operator.
Speaker Change: We will now begin the question and answer session to.
Speaker Change: To ask a question you May press Star then one on your telephone keypad if.
Speaker Change: If you were using a speakerphone please pick up your handset before pressing the keys to withdraw your question. Please press Star then two.
Speaker Change: At this time, we will pause momentarily to assemble our roster.
Jonathan Aschoff: Our first question today is from Jonathan Aschoff with Roth Capital. Please go ahead. Thank you. Good morning, Hermann and Fred. I was curious, what was the 4Q24 Amalu's unit growth year over year? Hermann, do you want me to take that one? Yep, if you have the number in front of you, yes. Yeah. Approximately 2%.
Speaker Change: Our first question today is from Jonathan Aschoff with Roth Capital. Please go ahead.
Speaker Change: Thank you good morning, Herman and Fred I was curious what was the four Q 'twenty for AMOLED is unit growth year over year.
Speaker Change: Okay.
Speaker Change: Yeah.
Speaker Change: You want me to take that one.
Speaker Change: Yep, if you asked the number in front of Helios. Please yeah.
Speaker Change: Approximately 2%.
Hermann Luebbert: Thank you.
Speaker Change: 2%. Thank you and then was there any sales force addition, or attrition over 'twenty 'twenty four.
Jonathan Aschoff: And was there any Salesforce addition or attrition over 2020? as far as number of salespeople. Purely numbers. Yeah, commercial. No, it was held approximately.
Speaker Change: Okay.
Speaker Change: Okay.
As far as number of <unk>.
Speaker Change: <unk> salespeople PURELL, yes.
Speaker Change: Approximately constant.
Hermann Luebbert: Okay.
Speaker Change: Okay, and lastly, what's the acne enrolment number and maybe I missed that in your call and are you still comfortable with the data timing you gave last.
Jonathan Aschoff: And lastly, what's the ACME enrollment number? Maybe I missed that in your call. And are you still comfortable with the data timing you gave last? Yeah, the enrollment number is 116. However, as the data look right now, we may be able to conclude that trial a bit earlier. Okay, so with 116, or maybe if... Maybe a few more. All right. And okay, so clearly the data timing, I guess, if that number is going to be lower, should still be safe, right? Yes.
Speaker Change: Yeah.
Speaker Change: Yeah.
Speaker Change: Element number it's it's 116.
Speaker Change: However, if the data look right now we may be.
Speaker Change: Being able to.
Speaker Change: To conclude such time, a bit a bit earlier.
Speaker Change: So with 116 or maybe a few more.
Speaker Change: Maybe a few more.
Speaker Change: Alright.
Speaker Change: Okay. So clearly the data timing I guess, if that number is going to be lower should still be safe right.
Speaker Change: Yes.
Operator: Thank you very much. Again, if you have a question, please press star then 1.
Speaker Change: Thank you very much.
Speaker Change: Again, if you have a question. Please press Star then one.
Bruce Jackson: The next question is from Bruce Jackson with The Benchmark Company, please go ahead. Hi, good morning and thanks for taking my questions.
Bruce Jackson: The next question is from Bruce Jackson with the Benchmark Company. Please go ahead.
Bruce Jackson: Hi, good morning, and thanks for taking my questions moving over to the income statement now that you've got the more advantageous transfer pricing how do you think that could impact gross margins in 2025.
Bruce Jackson: Moving over to the income statement, now that you've got the more advantageous transfer pricing, how do you think that could impact gross margins in 2025? Yeah, Andrew. So, we have a transfer price of 25% through 2025. And so, while Q4, we saw the impact of that in Q4. As I mentioned, we had higher sales in Q4, higher revenues, and yet the cost of goods sold was slightly down. So, Q4 had a slight mix of that, but for 2025, it's going to be almost exclusively at the lower 25%.
Bruce Jackson: Yeah.
Bruce Jackson: Great.
Bruce Jackson: So we have a transfer price of 25% through 2025 and so.
Bruce Jackson: While while Q4, we saw the.
Bruce Jackson: The impact of that in Q4.
Bruce Jackson: As I mentioned, we had higher sales in Q4 higher revenues and yet.
Bruce Jackson: Cost of goods was slightly down.
Bruce Jackson: So Q4 had a slight mix of that but or 2025.
Bruce Jackson: It's going to be more months exclusively.
Bruce Jackson: At the lower 25%.
Bruce Jackson: Okay, great.
Bruce Jackson: And then you mentioned that there was a price increase in the fourth quarter. Can you tell us how much of a price increase there was in percentage terms? And then also, did it have any effect on forward buying? Yes, so that was a 5%. Price increase. So our tube of Amelus is $363. And there was certain customers, we do see customers do a bit of a buy-in. before price increases. So that bit was reflected in Q3.
Speaker Change: Okay, Great and then you mentioned that there was a price increase in the fourth quarter can you tell us how.
Bruce Jackson: How much of a price increase there was in percentage terms and then also did it have any effect on forward buying.
Bruce Jackson: Yeah, so that was a 5%.
Bruce Jackson: Price increase.
Bruce Jackson: So our.
Bruce Jackson: Two of animal loose.
Bruce Jackson: Is $3 63.
Bruce Jackson: And there was.
Bruce Jackson: Certain customers, we do see.
Bruce Jackson: Customers do a bit of a buy in.
Bruce Jackson:
Bruce Jackson: Before price increases.
Bruce Jackson: Got it.
Bruce Jackson: This was reflected in Q3.
Bruce Jackson: Okay, okay.
Bruce Jackson: Okay. Okay.
Bruce Jackson: Then, last income statement question for me, the SG&A and the R&D have both been kind of coming down a little bit. Is that going to continue to trend that way in 2025? for the SG&A piece of it. we're expecting to hold approximately steady. you know, adjusted some of the cost structure, like, you know, the head count and things like that to what we believe is an appropriate level. So, no. No adjustments on the commercial FP&A or anything like that.
Bruce Jackson: Then last income statement question for me, the SG&A and the R&D airports in Canada as long coming down a little bit is that going to continue to trend that way and in 2025.
Bruce Jackson: For the SG&A piece of it.
Bruce Jackson:
Bruce Jackson: We're expecting to hold approximately.
Bruce Jackson: Ultimately study.
Bruce Jackson: Hum.
Bruce Jackson: Hi, Jeff its Tom.
Bruce Jackson: The cost structure.
Bruce Jackson: Head count and things like that to what we believe is an appropriate level.
Bruce Jackson: So no.
Bruce Jackson: No adjustments on the commercial up G&A or anything like that.
Hermann Luebbert: pass it over to Hermann to speak about R&D, if that was part of your question. It's the same about R&D. It's going to be stable compared to the last couple of months.
Herman: Pass it over to Herman to speak about R&D.
Bruce Jackson: That was part of your question.
Bruce Jackson: Hmm.
Bruce Jackson: No. It's the same about Andi is it's going to be to be stable compared to the last couple of months.
Bruce Jackson: Okay.
Bruce Jackson: Okay, great. That's it for me. Thank you very much.
Bruce Jackson: Okay, Okay great.
Bruce Jackson: That's it for me thank you very much.
Bruce Jackson: Yeah.
Hermann Luebbert: Thank you.
Bruce Jackson: Thank you thank.
Bruce Jackson: Thank you. This concludes our question and answer session I would like to turn the conference back over to Hermann Leubert for any closing remarks.
Hermann Luebbert: Yeah, thank you to everyone for your participation today. We are pleased with the sales growth we had in 2024, and as we plan for the future, we are putting a great deal of emphasis on becoming cashflow positive and managing our expenses without sacrificing sales. Although we reached record sales annually of 37.3 million in 2024, which is more than double from the 18 million in 2020, we continue to make changes and pivot at times to improve our sales and marketing effort. Every day, our sales team gets new clients, which is a victory for the customer-facing strategy we previously implemented.
Bruce Jackson: Yes, thank you to everyone for your participation today.
Bruce Jackson: We are pleased with the sales calls.
Bruce Jackson: 2024, and as we plan for the future we are putting a great deal of emphasis on becoming cash flow positive in managing our expenses without sacrificing says.
Bruce Jackson: Well there'll be reached.
Bruce Jackson: And Julia was $37 3 million in 2020, full which is more than double from the $18 million in 2020, we.
Bruce Jackson: We continue to make changes in probably about at times to improve both sales and marketing efforts.
Bruce Jackson: Our sales team gets new clients, which is a victory for the customer facing strategy. We previously implemented.
Hermann Luebbert: We look forward to speaking with you again when we report our first quarter 2025 results. Thank you and have a nice day.
Bruce Jackson: We look forward to speaking with you again when music pulled over first quarter 2025 results.
Bruce Jackson: Thank you.
Bruce Jackson: Have a nice day.
Operator: Your conference is now concluded. Thank you for attending today's presentation.
Speaker Change: The conference has now concluded. Thank you for attending today's presentation you may now disconnect.
Operator: You may now disconnect.
Bruce Jackson: Okay.
Bruce Jackson: [music].
Bruce Jackson: Yeah.
Bruce Jackson: [music].