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Chembio Diagnostics (CEMI)

Participants
Philip Taylor Investor Relations
John Sperzel President & Chief Executive Officer
Neil Goldman Executive Vice President & Chief Financial Officer
Kyle Bauser Dougherty
Max Masucci Canaccord Genuity
Bruce Jackson Benchmark
Per Ostlund Craig-Hallum Capital
Call transcript
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Operator

Good day, ladies and gentlemen and welcome to the Chembio Third Quarter 2019 Earnings Conference Call and Webcast. All lines have been placed on a listen-only mode and the floor will be opened for your questions and comments following the presentation. [Operator Instructions]

At this time, it is my pleasure to turn the floor over to your host for today Mr. Philip Taylor. yours. is floor the Sir,

Philip Taylor

Thank you.

within we let concerning the X, the remind the statements that current beliefs company. today, remarks Before XXXX Act made XXXX forward-looking November me company's today, during you call of the begin this of meaning the of include Securities conference

filings to Risk assumptions, to and control, uncertainties materially and from time uncertainties, risks statements Chembio's on including of which Forward-looking Annual and under numerous those from XXXX. Form are many in including Chembio's elsewhere in XX-K SEC time projected. subject differ Factors Chembio's Chembio's risks those are beyond Report may results described for

the no today. the SEC company's forward-looking to obligation matters. or revise concerning statements these undertakes or I update to made you other any of filings Chembio encourage with publicly all review

With to that, over Sperzel, President the Chief to John call I Executive Officer. like and turn would

John Sperzel

Chembio three quarter to you today. continued execute for third the team during our The on of priorities us joining Thank XXXX. corporate

generated by total to impacted of during was quarter of product prior Africa compared lower period. the the third R&D Total sales year million, $X.X and revenue million. including sales revenue team in lower Our $X.X revenue

pleased in America impacts to on are significant we will product positive considerable recent business believe States, have Pacific. highlight and developments I'd our the forward. few sales However, in a the increases Asia with Latin United like that moving we

while flexibility dilution investment a grow by our capital million limiting business, the This Perceptive sheet In loan balance leading one to closing $XX world's firms. September, strengthened any to shareholders. care-focused we our provides our of Advisors, term health with

point-of-care will stock. XXX,XXX the $XXX,XXX state, of markets definitive common cash distributor the an acquire company today, held a the terms tests Under of The into enable in agreement infectious shares to Chembio's Earlier of agreement diseases. and pharmacy and of for Brazilian approximately Brazil. will make Orangelife, manufacturer acquisition private announced Chembio upfront expansion has signed privately that a and diagnostic commercial payment we

consulting include shares of regulatory common agreements XXX,XXX and Chembio certain XXXX enter Separately and that certain between sales of up to milestones achievement XXXX. payment into could on of stock, the based will additional

conditions, fourth of to is customary XXXX. acquisition, expected owned And the the quarter Chembio and a transaction be Orangelife renamed during subsidiary the operate Chembio. closing wholly following close to of Subject Diagnostics Brazil as as will

two important received Health WHO. by We approvals World the Organization,

supply manufacturing company First we our received STAT-PAK Malaysia WHO cost-effectively markets. international the and to approval Prequalification facility, allows HIV manufacture our of Malaysia in which tests

approval the Second, for we the expand our WHO which easiest of HIV prequalification use we CHECK SURE self-test allows is commercialization self-test, HIV received what to available. company believe to

a our entered company with develop Finally, pharmaceutical our can with into collaboration diagnostic platform utilize to undisclosed point-of-care reinforces and biomarker. test an second a we detect Takeda global a to This companion compatible quantitative or collaboration tests. represents portfolio belief of major a our to Pharmaceutical we build that

for today's call the expanding then our discussing additional pipeline; and for questions. quarter financial and growth. we'll three make commercialization; results, our call start few progress our preparing we'll Neil two, closing remarks on third advancing One, three, corporate On open review R&D Then a will by I'll priorities.

our expanding Starting commercialization. first our with priority,

States, an XXX% to Latin a and in the of increases quarter compared XXXX, During year United sales the prior product in of in a Asia. the XX% third a increase increase XX% significant had including number in regions increase period, America

timing Africa, benefited XXXX to which region. in Product and largely Europe ordering Middle which product by the and of the sales a by These attribute the decrease from increases acquisition opTricon. in offset in tenders in increased patterns were East, XX% XX% of we sales

notified of which during respective XXXX States, On We to of performance July third quarter the year compared its in not HIV chain prior main have nine sales technical would as and to first increased during the it's rapid an our estimate our distributors issue. and particularly that pleased did United supply XXX% the of one U.S. periods. when XX, with it XXXX, the customers competitors it to are months and XX% was and resolve test unable supply as its

they've On sent for "That in customers manufacturers experienced the U.S. and HIV issues." for memos orders of delivery Director production indicating Division "That of their their Centers resolve to companies test to diligently rapid Control CDC, tests." are working October XX, their of HIV both further have informed the Prevention HIV/AIDS two customers Disease Prevention, that And stated delays

rapid of a effective CDC presents increase tests. great further the three to Chembio to competitive other HIV products the to Chembio opportunity in FDA-approved And products. targeting them of is Chembio's including market, reminded sales U.S. HIV market. our customers This for U.S. accounts situation in the sales HIV available tests team convert CLIA-Waived

our our multiple grow expanding sales infectious including markets. in geographies through presence, global new We in entering confident registering commercial remain and disease drivers, ability to products new our

is SUS. a the system diagnostic Today's world's publicly for announcement with of an administered the and privately country Orangelife, acquire the known definitive world, expanding the agreement the has largest government-run ninth economy United or by largest our System, Brazil sixth step as company, GDP important business healthcare a and population. by in Health to held largest in Brazil,

Brazil's health the Fiocruz, for and a national which demands biopharmaceuticals, Foundation of and disease have to subsidiary Bio-Manguinhos of our with point-of-care production We development Ministry the Health in Oswaldo the federal the to products vaccines, sold products of diagnostics been XXXX, system. history of to is infectious long selling collaboration Cruz government. Chembio a public of have Brazil's Since responsible primarily meet

of the Health tests years, through infectious Ministry disease partner Brazil's last of we to supplied XX Over have millions our Bio-Manguinhos/Fiocruz.

most expand federal testing. Brazil in government. be why market to on Brazil? that an plan So for success infectious we've had the with by and building business in investment disease attractive make We consider the We our largest Brazil to the

reach channel. Brazil Those small XX,XXX pharmacies states unable hospitals X,XXX government private Brazil. the federal market for the through the include are that in XX,XXX outside retail that federal and responsible markets There are labs the government large markets which in market was includes Brazil, includes its that of Chembio in previously to

believe effective to to We the presence government access a Brazil, markets the physical federal way is country. in the have outside in most

With first Class of devices including Orangelife of facility Brazil, will IV the certified, to ISO medical approved we III acquisition have HIV GMP according a produce ANVISA and production self-test. in by the Brazil's ANVISA-approved that to is Brazil II

salespeople key success that a believe also having our Brazil We in own is factor.

calls, new multiplex dengue markets. distribution Brazil growth With chikungunya driver. Zika the acquisition, as test identified in salespeople network a access private On the we own and our for recent have a we'll state, and to and our future pharmacy

presence the health be all we complicates three country. to and and treatment valuable for is these Brazil believe for across which treatment. these stand-alone determine believe our We viruses, there tools In disease viruses significant products due need identification for tests care multiplex paths the will a of to outbreaks and professionals identify

is We further of Bio-Manguinhos for $XX our with products to we in We likelihood continue and the acquisition will annually orders of that Brazil believe opportunity million increase Health. success. approximately the Ministry from believe partner to the these work Orangelife secure of our

for million of call, one $X.X from chikungunya by last conditions the Zika mentioned our $X.X two one been contract Zika the contracts ranging contract multiplex to As to from UNICEF, team our million our million. test, test, working awarded million and $X.X meet dengue $X.X on for has ranging to

receive to related to initial that discussions and that contract our We're $X.X pleased confirmed related the I'm the Zika conditions meeting conditions for those included tests also order award that and a test. an in confirmed met evaluation test. purchase to we meeting we've will contract, work also we test report remain confident UNICEF all purchase to and and which conditions toward for receiving a million of order the the clinical that UNICEF Zika schedule with continue for delivery about the subsequent multiplex

Finally approval WHO significant Nations of company. make is used other driver the as agencies approval by decisions. standards and our self-testing CHECK United prequalification a Fund and signifies SURE the purchasing of safety The as HIV quality, WHO regulatory product growth PEPFAR, we international meets procurement performance for Global self-test that global and to a The and we Unitaid as the HIV pre-Q consider approval, view such

buffer HIV by ease required rapid The only solution device world's HIV XX The minutes. using design smallest and any required the collection blood CHECK test self-tests. capillary self-test use provides CHECK by devices sample the of unique results SURE eliminating buffer in bottles need SURE of separate and self-test provides HIV other unparalleled HIV for the solution, integrates and

HIV professionals. self-test HIV I HIV to and sensitivity users XXX% when which demonstrated CHECK SURE trained of The of detects II antibodies XX.X% comparing untrained HIV self-test specificity to and

HIV CHECK WHO The pre-qualified by professionals essential pre-qualified is is health marked, CE self-test I/II approved, that trusted the SURE newly CLIA-Waived, FDA Chembio's WHO the around HIV assay element globe. and care company's of

policy CHECK was Unitaid of Chembio's CHECK addressing that assay the Africa HIV launched and HIV In XXXX Europe funded Initiative barriers. versions addition HIV I/II self-test. market, Chembio's in private part with was HIV two Self-Testing STAR Chembio's by self-test as by accelerating of SURE regulatory of label the evaluated is SURE by in self-test goal adoption

the have population HIV vehicle strongly found positive are expand to estimated of that's that treatment. and WHO their think access CHECK living HIV was We of HIV the performance the acceptability because to HIV with SURE widespread important self-testing world's superior adoption. self-test XX% and it's as recommends The to unaware facilitating status

self-test The than believe finger-stick the perform main we world. scientific referenced test HIV even a is the data test for clinical the product in blood-based in according detecting our specimen HIV clear oral HIV to clinical performance is fluid, blood is insert. easiest better to our that And that competitors'

Turning priority, R&D second our pipeline. to corporate advancing our

R&D we and multiple platform advancements affairs made During biomarkers. in numerous third point-of-care the across our in notably quarter regulatory

for test mark the of we quarter we CE As the CHECK the for fourth HIV noted prequalification this anticipate XXXX. self-test received earlier, WHO obtaining SURE and in

our for Administration Food We HIV the our the XXX(k) year-end test. approval multiplex and anticipate Zika U.S. and for approvals including test syphilis PMA approval before Drug BARDA-funded two

tests. of manufacturer future an innovation we by rapid data are to testing rapid success year a include opTricon, transmission requires the provided handheld in configured believe developer analyzer. and diagnostic extends of that which One test of for beyond that analyzers storage, ago, acquisition the all diagnostic and We capture,

all increased and R&D of results, development on our of advanced diagnostic sensitivity, which provide an focused multiplexing quantitative require is tests analyzer. Further, team that the

first you we razor diagnostic analyzer development factor tests. of the CE of inform to have commercialization as the obtained and the model aim pleased and and an the improved portfolio an advancement which create rapid a important mark. that through ease-of-use of to we team a the has is analyzer our a I'm next-generation blade approval, both This regulatory form completed a

Today, partners. I'll product In products areas: updates develop addition development internally that in to our are two provide concussion. to our and collaborating we're funded fully diagnostics funded initiatives, companion by

advance to continue pharmaceutical of strategy technology point-of-care tests with our We to certain to to collaborating develop companies leverage biomarkers. identify our

we Takeda certain milestones. the quarter test signed the undisclosed be diagnostic with Takeda a third to terms develop will funding point-of-care the satisfying to Pharmaceuticals quantitative biomarker. agreement During subject by of for provided Under an an agreement,

to We expect December biomarkers Chembio's XXXX. to proprietary blood platform of end complete whole finger-stick in blood the using feasibility disease detect two by specific technology

test product In diagnostic identify first approval, AstraZeneca, both preclinical important point-of-care studies CE mark. collaboration completion with obtain regulatory the and we respiratory been view of we also and a as quantitative have completed eosinophilic disease milestones. and preclinicals a The successfully developed development the to

regulatory are optimistic design we work clinical FDA trials for about finalizing this approvals to of product, the toward continue and We additional including and achieving XXX(k). regulatory

us of consider were Finally opTricon acquisition previously platform adding biomarkers allows to that analyzer our to technology the the challenging.

develop we're for mild point-of-care confident traumatic the technology, fluorescence-sensitive including concussion. opTricon a in our introduction technology the to With in ability brain test or injury increasingly of our advances

in of Perseus level continues capabilities the of test. to develop Our team provided detection we multiplexing those to including concussion collaboration the our are positioned including biomarkers by platform enhancement well evaluate a Due opTricon Science. analyzer, advanced numerous capabilities to with we believe concussion and point-of-care

our improving targets obtaining preparing objectives: growth. financial we're U.S. Malaysia several facilities achieve expanding WHO our for to additional To third Turning important our facilities. corporate our operational U.S. manufacturing pursuing our and prequalification for automating and priority

manufacturing increase to production capacity, increase efficiency strategy Our automation well U.S. is gross margins and designed flexibility. as as

manufacturing lines New We expect to York automated our achieve have facility by our objective three in year-end. to

is this and is delivered expected year-end Line production number be commenced to one be Line week tests three delivered be quarter of is expected this earlier We the first of number in operational on DPP operational two of the being and to XXXX. number quarter second line in XXXX. year. by

commenced to businesses. foot manufacturing So by U.S. our XXXX, locations growth. includes as operational will the all facility. This to all the improve facility to of capacity components our single facilities, expect a We for headquarters and multiple for be of XX,XXX and building corporate three square to serve which plan middle have house and we U.S. our additional lines expand U.S.

The is warehouse administrative, shipping first of three operating phases with in and complete facility new the functions planned all today.

which during Malaysia STAT-PAK allows manufacture quarter and test the fourth was markets, finalizing commencing HIV for international program planned the XXXX. approved subject research which STAT-PAK III, includes of supply quality by October of II, reached Phase which We company facility includes certain plans prequalification it in the in We're our to manufacturing Health a functions requirements. produce Organization to regulatory and XXXX the and tests. our completion for when manufacturing in development are both significant and which approval Phase World in milestone This are HIV to to we Malaysia,

facility, cost pursue sold way to will provide produce in of goods qualification for This our we be this future global the production business and tests capacity to opportunities to in this facility. expect production to and increase. Through paves reduced new other

to I'll details turn on it Neil Now, provide our to results. financial over

Neil Goldman

Good afternoon, everyone.

the one sales cost will as not an distribution simply revenue. we item amount each of sales immaterial to sales these accounting an policy XXXX implemented, At product we mention and to recognize was established that regarding of housekeeping period. and cost have corrected product start of Before I freight begin within adjustments increased within net by equal properly expenses revisions

prior the million, not License and always decrease $X.X of compared and of X% the decrease were X% quarter incur XXXX, of to grant revenues occur results. but and of period. performance was the the XXXX a XX% in prior obligations, third into Net the total was R&D for the quarter certain an a royalty $X.X program period. revenue sales to combined product to the to cadence quarter compared R&D a Moving and we year continue revenues million, year in do year of of timing million, of third the In $X.X expenses. XXXX prior compared quarter, period. increase third related the which to

to in Latin from sales prior nearly related U.S., benefited shipment initial and chikungunya described a to by the gains net dengue year large region John As Brazil compared Asia. of initial earlier, America health the period, to benefited sales experienced every Europe product America, Latin the our and competitor and Zika, delays. the U.S. public tests for and customer from increased demand led

an product The XX% timing margin and in combination prices. the basis increase Third in quarter was the quarter period. which gross net sales product XXX percent point sales to and from third product $X.X reduced were year an improvement compared prior gross Africa selling costs This contract percent. largely the in margin we product product for tenders margin margin of improvement in The increase the XXXX labor revenue from compared to to the of XX.X% period. was region. prior for average product year impacted by by was a million of lower Gross attribute improved favorable

a Gross see basis to higher XXX unit offset product margin sequentially, sequential improved also basis higher not costs a points. the average selling during because and improvement on related lower volumes We prices labor Africa. the lower quarter by were by did

for were during of opTricon of prior GmbH includes the by the compared increased fourth which R&D research XXXX. expenses, acquisition Chembio $X.X period. and XXXX million to in and the $X.X third of to Germany general that the million administrative selling, million expenses development quarter closed costs $X.X and Diagnostics formerly related Other quarter year

loss the and new and resulting rent related our quarter costs Net loss or of share diluted in prior noncash higher leasing SG&A York. increased in New period. was $X.X equity by Diagnostics the to from costs Chembio acquisition of Hauppauge, $X.XX other diluted compensation Germany, million, or facility the primarily share third $X.X per net in compared XXXX $X.X million million, $X.XX a with per year of

quarter, cash balance million. the as XX, pleased September totaled were to September million. $XX.X we positive million. XXXX Net XX, sheet, capital the as $XX equivalents XXXX operating third flow have and of of On $X.X cash In working was cash produced of

looking to outlook XXXX. for our Now,

the towards million our expect we $XX to We lower today guidance revenue end of of revenues are Based in to reiterating come range the on $XX range. are where we to our million. be in that

Now, call some I the make closing will turn back John to remarks. to

John Sperzel

progress the collaborating product During pipeline year facility which and our the continue Chembio period, manufacturing to versus third growing for significant we we the team R&D the business. the improvement. foundation flexibility internally quarter. made automation We strengthened our quarter, a additional important increased world-leading approvals, sheet regulatory solid building by our corporate balance and through three priorities achieved sales during provides on advanced with organizations are growth prior several and The

acquisition the the another of for create Orangelife believe will we Finally, growth driver company.

With Operator? that, questions. to up we'll now open it

Operator

Kyle Thank first you. go Dougherty. at [Operator Instructions] We'll Bauser to

Kyle Bauser

Hi, evening. here. for Thanks and update taking great questions the good

John Sperzel

you. Thank

Neil Goldman

Hi, Kyle.

Kyle Bauser

just I'll start maybe in Brazil. So

I Orangelife understand And channels. that pharmacy you'll Bio-Manguinhos administrative rely correctly, Orangelife to your just the state to on So supply that you'll presence able still correct? expand commercial and acquisition, be in Brazil. Is through to then private the health on

John Sperzel

right. Absolutely

Kyle Bauser

channels? of Bio-Manguinhos Or distribute the not to these into into second Orangelife maybe that And Health? – Ministry does a part and does supply other

John Sperzel

or on those not. Bio-Manguinhos the supply Bio-Manguinhos primarily does three retail state private been to not Orangelife is that the markets has pharmacy. the market And focused

have self-test to did successful federal pilot a Orangelife HIV with very the However, government. program

in had from institutions but the as in buy fever in Fiocruz/Bio-Manguinhos disease largest, the from to and scientific some Brazil to organizations past local of on has option tests. So and is the Brazilian Brazil they federal tropical also the one government buy major the of several

federal to depending of not buy very to other country or government the able positions are also expand play decides simply us in our in So these well that Orangelife we on which presence in the the way markets we acquisition think today. to

Kyle Bauser

of quantify maybe helpful. high could with $XX in talked an multiple that the sort Brazilian to? can't already you've Orangelife. be level annual basis you the it. a today's opportunity of before past Got That's about you've already talked the and just kind Okay. Can new And three announcement this – that if that Or was it of other channels? access opportunity is to million had $XX million and today these on you you

John Sperzel

I'll So, to that close have a highly But let Obviously, going to today ourselves we definitive still some try so to agreement quantifying give We're get signed me within the to we some of give hands. But our that's Orangelife opportunity don't ahead terms of color that. happen. it. want to that's until confident I color. in

the we're order not without still that Brazil. disappointed that's multiplex multiplex to federal the have No companies first has November kind they thing as not think dengue, chikungunya. of tests the and a week states is Zika see from because we they are states government. those what's procuring dengue has the and test of like still the that they first they to country, Zika Chembio Orangelife. see annualized have one opportunity government while the million and for chikungunya, the our has tests of and believe $XX locally here say still the to today purchased tropical the disease is, in the an sitting be test federal an fever I in still And And to happening,

that help up that also the when states, a these And us the able if will business, to to happens. get supply to So direction. better order to very give tests it kinds Bio-Manguinhos to model to that, physical that confident having in in be we but ends of moving win Brazil presence support feel allow we'll

positioned we're Orangelife think way well the subsidiary federal to Chembio regardless really which the hope of of helps a we as a government that I Kyle. states little decide or So with buy. bit

Kyle Bauser

with And if ask here. one just more. Yes. I'll that does. No, I may Brazil stick

the supplier halted to previous resurface by was what I And or reestablish delay that into wondering sole tried guess, So I'm ANVISA would as that, with Chembio has their the to just supplier the for while? that great. in a color simply they just that order it Chembio $XXX,XXX there sufficient of gave may of just close Is be be sort Any that. license? would QX

John Sperzel

diagnostic absolutely We're hundreds small thing first would is aware tests thousands that like I sufficient. dengue. say was of of rapid of order not states for ordering So, things

we've been the portfolio And we in Orangelife something aware that and focused to are participant will and -- that has and of that a obviously on. So present. of that's been our that as very And business. part of win past having position so us Orangelife

say the So thing that would that's Kyle. first I about that

of the company terms supplier that that the tried was the tenor just unsuccessfully. from of removal the In previous ANVISA had to Brazil, general they fight

performance terrible. will still are in I reenter, not be was for it they the And the suspect them difficult market. So to very because product

Kyle Bauser

Got it. it. Got

that's jump Now Thanks in helpful. I’ll back queue. a lot.

John Sperzel

Kyle. you, Thank

Operator

next go Canaccord Massaro at Mark Genuity. We'll to

Max Masucci

is on Masucci This Max Mark. for

John Sperzel

Max. Hi,

Neil Goldman

Max. Hi,

Max Masucci

Hi.

you great So the growth had in U.S.

bit than Africa. a characterize you the -- tenders? or sales how And the in prequalification You expected called programs you're position your a then wins for strengthen appetite broad out Africa? similar initiatives does that in two, lower I has when how one, at competing or number number education these how level; just for recent guess disease

John Sperzel

had company significant basis. And in growth I'd the say on in year-to-year think if of of been themselves. and HIV I a a you largely it's look market been that one in has So, -- quarter-to-quarter to HIV Africa, Africa, that's at there the self-test self-testing terms

the we there we remarks, is better to evidence and and as win ease-of-use, -- specimen in We clear is said that we that comes that a for So has HIV. it prepared to unparalleled ease-of-use. have fair it's expect I share a of think detecting we product know When market. the blood

the test ease-of-use share fair self-test going capture we of to HIV well Africa. positioned our test, think of in be performance and of to the we're our So opportunity when you combine the a

there will countries six month. long and can way Africa, that it's prequalification take. require pleased with lines we're varying In some are how and will for I it pave say Now In one registration cases commercialization the very be help months. some it cases that will many the will on but time WHO local that in and

but a have still that's the they we following ready been we process go so team trigger, which our those obviously having countries, that pull have been in So to many discussions, through and have the to announcement. has already

Max Masucci

Great.

so how or there? ground margins quarter And sort how understand this guys the I great. I'm long margin up running hitting you get from affect are the quantitative XXXX directional puts guess will I take gross be the facilities, Malaysia running? guess the you in of it line Any trying to might other standpoint. and just to on just a gross and takes in on fully would

John Sperzel

had Yeah. pre-Q I have WHO both. pleased bit pre-Q little We're but to by the took have the so and achieved will bit facility. to excited end the it Malaysia the we're it's Admittedly facility that, slipped self-test on Malaysia have would longer and And HIV right said this WHO them those we for a of we into own have I that than for the QX. for a little QX, hoped.

And in a I think labor high and very pre-Q we as are in labor move slow that goods of of HIV see margin characterize a to margin on We test rate, facility, as New and take the you as overhead in first the a that production where quarter. don't a part think XXXX but improvement low pretty improvement we'll have fourth can York, improvement Malaysia, and rapid gross we starting any you until overhead far impact when the gross and ramp from material cost out Malaysia where we is the rate. WHO that it have of

Max Masucci

Great.

Neil Goldman

Yeah, Max.

it's other The Neil. Max, thing –

margins I in costs from bit points standpoint, thing lower shared sequential related up being prepared about we've lower that improvement XX.X% XXX basis prices by being been with Africa the by higher by remarks from volumes to that selling average with unit the color talking to and the offset other about. XX.X% a a The going driven labor

and as related the original in the optimistic the you Medford talked of which time that facility John to know And U.S. our manufacturing addition, are and everything year. in in new about distribution two very running we're line the one facilities in about getting the on new half we into and we're where one next first In Hauppauge. currently

Max Masucci

should Great. so more Neil above us helpful. bit a while now. the expect little came OpEx in OpEx we pacing bit you in a quarter. general that now And in a I sheet terms you have maybe just the your flexibility? spend in for of have and you, flexibility of to appetite the Thanks. That's what balance more I bit that guess, have

Neil Goldman

Yeah.

we XXXX. for achieving flexibility use company word out objectives we talked to will set us be. we've that XX% what there to the growth timing towards million terms pacing the of or So the numbers put certainly and your it haven't of operate in and gives as by We've facility long-term announced credit with drive Perceptive the that $XXX of revenue gross of margins

think from improved million And inventory. at the indeed our we've said, quarter cash though -- in last quarter the have. our look cash generated focus I included million being a even continue strong of receivables of use balance sheet that a the you that -- we operations you lower and the the on if cash can $X.X usage we with change doesn't said, effective That favorable that that from just as always in as got the and $X.X we'll see from in that and I was bank

John Sperzel

that's focus are So, important Max, and forward. Cash sheet preservation and balance John. point very strong just a that. a put going having this is on I'll

Max Masucci

Thanks.

Operator

We'll at to Bruce Jackson going Benchmark. next

Bruce Jackson

Thank flowing into over questions. you to quarters? for how the With my you revenue the taking new anticipate next regard units that couple of do purchase order, of

John Sperzel

Bruce. Hi,

and anticipate delivery. of it's if performance to going with anticipate get We're that it We the quarter. in confirmed throughout also XXXX. second first confirmed start now being of million we're the that yet, quarter, being excited know $X.X going working Don't that right we scheduled on Zika UNICEF of to are XXXX. delivered, But most first we So our purchase order. rapid test order the them that

Bruce Jackson

to test the AstraZeneca give willing status us combination on And the diagnostics you'd then, update be I a was And test. the FDA. syphilis wondering the with if companion of quick

John Sperzel

restricted obviously I'm about in bit say little AstraZeneca. So, a I can what

said is about I about, say the what I what So can prepared in it. remarks

of terms HIV of In to We're before syphilis we the optimistic for to year. end continue that happen. about be the that excited getting

to team agency. the that the light the have too ongoing. fair sales into to want hit And the running. excellent. review green ready the is Once while dig to that, don't get trained. that's from is process much looks Data But that, ground I we think FDA. Our I we don't

Bruce Jackson

And then, Orangelife that for now to with to you do I'm And acquisition about last curious right time thought in the the these timing. is guys. the acquisition, an Brazil. me why about just know

John Sperzel

on XXXX. I've joined had that I Chembio my since eye company in

blame number long. physical and me hands the that steering taking our category. presence so a wheel, on the in for put in no-brainer commercial one I you our But having So country will

Bruce Jackson

for That's Okay. it Thank me. you.

John Sperzel

Thanks, Bruce.

Operator

Craig-Hallum move next Per We'll with Ostlund Capital. to

Per Ostlund

afternoon, guys. Good Thanks.

John Sperzel

Per. Hi,

Per Ostlund

-- catch domestically. A from the ask, obviously I situation. to HIV now. sniped the to We I ones seems bunch my closer on that to of my wanted questions Abbott one were favorite situation up of no got And seemed here that here of But remedy. want just aware

of prospect issues the introduced you as now actually having supplier a well. then But second

not is? And that So other one, the party unique can what going issues are all? to I that at to and what issues who -- are are these identify be the second I'm be, you're -- thing subject parties the wondering, to you guess them creating would then

in is, that I than so given last that rather seeing the lot the the the for durably sort Abbott here outages. to question, apologies of to think former guess part a win what's of, you've some take back serviced then And customers past, advantage you're customers? of of bolus, differentiate you you? these supply these three-parter And do you going How can if of a onetime able

John Sperzel

Great so testing, tests. can questions, the of they environments evaluations in need a be customer U.S. the Per transition sticky market, terms in because in do many to little in of bit HIV customers

or have like matters no inventory customers Cardinal, folks Given Henry And shortage of a supply are changes like in product Schein that well. stock. distribution the out as channel, this pipeline they start because, McKesson, literally Fisher, their to

the these in channels So distribution some almost, are of cases. are whole they dry

customer is if when in that customers back. we'll -- stickiness those happen there, be manufacturers or other faster. can come And those conversion that same so there, that generally And much and

insight I'm many years But so the fortunately written over customers, supply not shortages, into letters don't companies, here about have at working challenges. XX product I've I to in those any none Chembio.

to when And issue, that resolve a a Alere supply the not the normally And And chain that and wrote. means letter formerly there's that as that's been technical issue, of letter Abbott affecting chain. a there's states that or able today. they have that's supply technical

-- Centers are didn't test. obviously customers Control of shipping And company. HIV for Uni-Gold their that they I have indicated Trinity the they And the second the that Disease Biotech. name that did. disclose the But eventually is not

position good tremendous that. And a in opportunity creates we that void ago, other States shareholders of the really some for sales that helped that, a So, competitors. own the our puts United take the have us our us team to fact years that in advantage invest

shortages sales If you look the quarter. of in quarter-to-date competitors and U.S. have these basis, our during the quarter very a really HIV on second substantial year-to-date from the and end improvement. happened And we the our third at domestic

just to So to starting. really these We're we extent continues. well And this to going that, customers. void is try to do convert the think

Per Ostlund

guess last me. Perfect. opportunity. tremendous I the one Yeah. It for a then seems like

to about, guidance, you pertains it to as Just steering guidance million. of to $XX end the the the $XX lower talked million

million before, the guide $XX $XX fever. that from from with upside because be nor from -- to the from was in was never want basic anything Brazilian UNICEF that's order the the kind of $X.X million clear Just totally million apples-to-apples -- to is UNICEF

apples-to-apples. this completely is So

John Sperzel

fact still for just But That's out Xth, November upsides. because given the And those we order on procure the we we're get to And product. sitting materials, here our we that the And before waned hope shipped optimism still bit. have a correct of that's year-end. little the Per. it level get if produce has

going to We're fight do. those up. So to we're for giving always we orders continue not like

Per Ostlund

Perfect.

I prudent. guys. that's Thanks think

John Sperzel

Thank you, Per.

Operator

We'll back for additional Mr. closing And to turn have questions the for that's Sperzel time, all the today. we any comments. conference or

John Sperzel

you great look night. Have updating Thank call. on support. all, you we us. our for for forward Thank a And next your you to joining

Operator

today's teleconference. thank will We that gentlemen, and Ladies your you for conclude participation.

a day. have may at disconnect great time. this You And