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Enveric Biosciences (ENVB)

Participants
Sanjay Hurry Investor Relations
Brent Kelton Chief Executive Officer
Barry Kostiner Chief Financial Officer
Robert Brezza Northland Capital Markets
Call transcript
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Operator

Good day and welcome to the Ameri100 2018 Third Quarter Financial Results Conference Call. All participants will be in listen only mode [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Sanjay Hurry, LHA Investor Relations. Please go ahead.

Sanjay Hurry

Thank you, Andrew. welcome XXXX and results quarter everyone call. conference morning, to third AmeriXXX’s financial Good release this website referenced on press earnings The on Relations website. of SEC the call page the the AmeriXXX and Investor accessible is

On the Chief and hold prepared Kostiner, Barry a their Brent question-and-answer Financial After management Executive Officer. Officer Chief remarks, today call are Kelton, will session.

such from expressed future and and business may limited statements that to as As achievements materially any known looking and future risks, a statements. other forward expected to intend, achievements results, belief, reminder, uncertainties expect, performance AmeriXXX results, or anticipate, levels differ or contain targets, factors cause this certain of could these of performance would, events and unknown identify that or estimate, conference likely, activity, performance by involve its will, to phrases forward-looking the or of Words but levels call activity, implied plan, and similar not relate future actual statements. or expressions forward-looking may

services, statements other new create, offers, for conditions world the industry. build retain businesses services, mentioned its other and limited estimates, about to intentions, currency qualified growth its ability and to spending customers that and those fluctuations financial the highly its and to the cause AmeriXXX grow plans, risks that types and affected its future and to the reduce concerning ability by attract market competitive to which around as and of to of market market conditions not and company personnel, common the nature it as the strategies, but not uncertainties, well Forward-looking AmeriXXX’s could but projections performance markets predictions, statements herein, that existing beliefs statements businesses, concerning services are business the information include, in specifically are company’s may operates. for the The and demand their following the the for acquire of risks be adversely the its level

more the these Form be a SEC should reports discussion website. of review filed SEC and with reports on factors detailed the investors risks, For which can XX-K through accessed and other AmeriXXX’s

no on and the based statements statements call are update or to are Brent. morning, AmeriXXX events, made opinions duty made. Chief like information Good circumstances. to AmeriXXX. reflect With statements in by statement today’s over Brent its Executive at call All said, I beliefs are undertakes the to time future this of information management’s and to on Kelton, Forward-looking qualified the their entirety would cautionary that conference turn Officer forward-looking

Brent Kelton

Sanjay Good for you joining morning. call. Thank our us you, on everyone and thank

approximately the growth. balance with us and components million, three greater used to bonds sales are a and our into review July I In markets we I the operational on entered that flexibility There solutions give proceeds our $X take these raised capital sheet a financial to pursue comment placement quarter, of private Before were to want late which deleverage placement. net to performance for and transaction. our moment recent private

of exercised. First, of cash shares, will an common $X exercise X.XX an with number to approximately equal million Warrants XX.X million shares, warrants generate Class price $X.XX million us second A these A when Class of for

and have common share have $XXX the current billion made year and the on that a opportunities pressure progress between Third, into over the market price reflected services of sold cloud to B XX.X that understanding million we significant market for majority disconnect strongly valuation warrants is Class start a market shares. the value. Class B believe our we several the valuation been capitalize weeks, not our the shares market AmeriXXX number It of and on and service prefunded exercised an comprise What’s the since creating equal its the warrants the of the $XX intrinsic is past and of segment. billion intense in SAP the

in we US, deliver addressable focused to these As the markets IT are solutions largely growth. publicly only SAP sustainable, traded profitable on services the focus company

our quarter profitability. and results the third a and revenue quality on Our demonstrates both benefits focus adjusted differentiated of strategy of EBITDA purposeful

relative Turning margins to to ago and million revenue. results. our third were in staffing revenue mix more a Revenues the for versus solution continued quarter there the million are in deliberate year reflecting shift quarter $XX.X to profitable lower $XX.X sales quarter

turn solution into perspective. me on our Let sales margin focus higher

began solutions XX% quarter, XX%. this the our the year, third quarter at the For second solutions company’s put our empowered solutions solution total integrate was XXXX, sales strategy our its of of XX% first as our businesses sales approximately in In sell revenue. capabilities revenue to of and total revenue to and the focused set of hit In to consolidate with XX% minimal sales merged were of of as solutions was revenue and begin we full solution revenue. them sales teams acquired sales strategy acquired fourth quarter quarter place the started fully In total as place, . we in to our revenue stride, solution were

We -- a quarters. only we stages the in As to sales lower XXX you can approximately improvement on we revenue. sales percentage execution basis points material is of enabled solution three which our gross of still higher of and Effective shift see this in solution increased revenue. a total believe the for year-over-year as margins reflected margin early are have very sales quarter sales strategy in

the met for a spans include quality of that third would us margin gross solutions a ourselves developing proven the robotic secured the and transformation margin transformation XX project in year-to-date, the of path quarter market solution gross margin The markets third quarter Leveraging healthcare quarter for the of quarter steady are we service With consolidated portfolio gross and verticals, the growth, cloud with revenue. was consecutive migration are marks for XX.X% journeys. reputation I in wins. also margin offerings while in digital front resulting product and process XX.X% digital successful was market. sequential and in Greenfield healthcare note that improvement. at our implementing growth better high high beachhead have starting awards automation establishes project other net data digital data a their solution new life just business Notable across that on in we positioning third also

you S/XHANA win Travis our the implementation that sure not leading We first we secured It’s are a brand only further Matthew lifestyle underlines digital win almost and golf role growing ecommerce a also is solution of that and us. SAP's to our golf clear It was those momentum have transformation formalization to solution us Callaway’s opportunities in for that the worn. bringing starting this solution generate apparel SAP who fashion also are strategy, in Division, of SAP with sales. C/XHANA sales of to for with to

are earlier cost second guidance to the to report this our put approximate represents also attributable $XXX,XXX We turnaround in year-over-year. we very solution an directly as structure consecutive pleased with is adjusted year. our This of quarter as prior place focus a efficient and EBITDA in well that that line profitability sales to

a financial demonstrated corporate AmeriXXX finance valuable skills as our areas to After of are I results the of Before results, ahead is moving build the review for the new experience strategic review year some AmeriXXX call of Barry’s our team to of our the look on the Financial quarter, additions we Barry Kostiner and back come before as and balance the in our with a platform. and Chief detailed third Barry and opening Barry? growth to XXXX financial questions. on to will I’d his to to thoughts planning welcome Officer. like focused

Barry Kostiner

morning everyone. Brent. you, Thank Good

XXXX financial results, start my let a Before reviewing few off with about background. me just our words quarter fiscal third

on Brent this to out corporate for more AmeriXXX the I in Brent put joined As to team finance, consolidate as platform is a cash footing and join finance, planning the strategic initiative is to balance lends corporate and generate time and well growth. ship organic the opportune have on with of the the itself operating company’s leadership sales years firm expertise focused company revenue to one functioning in My margins sales company’s company a and acquisitions that sheet strategy today continued me M&A the higher put growth. his a XX clean with specific the noted, to an cost one accelerate and force, experience, given work solutions have and recently than further with

revenue services XX% the high of due with for third million, decrease results of for emphasis third variance margin Brent XXXX. million revenue margin to lower revenue sales less is shift sales the The in from a to due on Turning addressed our has principally $XX.X was quarter, as professional in $XX.X towards solution the quarter opportunity.

expenses the representing SG&A conducted period. result Depreciation expenses pace result see compared XXX to to as basis and a period year sales excluding a in $XXX,XXX the September attrition $XXX,XXX moment. a focused to decline was in cash fourth decreased for and $X.X into our therefore Gross though more compensation XX, a streamlining quarter. guidance restructuring ended expect amortization stock the XXXX revenue the component Gross our amount XXXX a margin at of compared ago to improved million a profit of year solution year-to-date. our on revised We is guidance points non of the of for a to charges as period. quarter $X.X million continued fiscal slower ago

approximately reminder, a member result EBITDA the GAAP positive to quarter $XXX,XXX who per equity period to a to for loss per electing of or generating of as third estimate has of million $X.X – issuance period. third to months. not loss company to million lists of period the was for of result consideration members acquired million mainly As a share in valued payable quarter net AmeriXXX elected former amortized receive a million an $X.X of $X.X acquisitions customer the onetime prior company the We approximately over and prior million income are payable accounted a adjusted as non $X.XX of which previously result adjusted acquisition $X.X of mainly the prior as our loss total or profit $X.X had EBITDA of GAAP each XX the a acquired cash. We of prior compared the to of $XX.X cash cash related a consideration share the compared reported two of in to third the receive net was million in in $XXX,XXX for acquisition. change of in for gain $X.XX reduced $X.X the at million former

aforementioned a months for September ended months from XX, excluding XX% amortization Turning to million September our for cash ended restructuring EBITDA estimate to range we revising At of year. in $XX financial of $XX XXXX clients' high results approximately revenues Gross the compensation and to XXXX, the services compared earnings the solution our in the of $XX.X Depreciation XXXX. million the same we guidance September were the nine XX, and year $XXX,XXX due for share for to XX, have to net period. of the decrease nine revenue $XX,XXX loss days today, approximately $X.XX mainly for decreased income $XX.X million million favor profit Gross period payable. period. ago schedule the a $X.XX ended of of historical September per and to a revenue billable consideration to ended for the flat our XXXX fiscal are expectations our was million million compared stock our quarter execution sales net expenses the of period September $X.X million. million $X.X amounted relatively strategy. or XXXX the solid to charges was we a $X.X fourth for share $X.X XX, holiday GAAP $X.X expenses due margin are assuming ago unchanged $XXX,XXX change number to period updated was estimate million attrition loss fiscal months was our compared sales low on Adjusted period professional and also non and for reaffirming for solution XX, GAAP SG&A in due XXXX pattern year prior fewer prior was margin of approximately margin of in profitability continued EBITDA With compared time, in to a per nine the XXXX or for streamlining to reflects adjusted full approximately period. the XXXX for ended of of activity.

Turning clean to our we and sheet, focused up the quarter. balance sheet strengthening balance of our on during further

aggregate certain have quarter ended warrants shares to to Series generate cash of XX.X placement investors warrants A $X As to repayment X.XX the equivalents about of private pursuant general will of $X.X the Brent purposes. issued of purchase A $X.X corporate the $X.XX common We the cash B of cash with shares the common Proceeds and an Brent the the million stock XX.X upon down its for and noted, indebtedness $X.X private were of placement, acquisition post million exercise profit per exercise. warrants placement mentioned million we at price and million us approximately of we along and at which Series for million raised obligations an million XXXX. of purchase as as from a from of of December XX, share from with common used stock credit to private of The million institutional investors a closing, Series for stock. shares pre-funded

of the the cash concludes sufficient Given working will capital have and fund remarks, my resources our to Brent. for to call prepared revenue This control of the year turn cost balances for needs the back balance we continued I the tight year. projections over balance now

Brent Kelton

Thank Barry. you

marketplace As for call want tailwinds path to infrastructure to solution favorable enterprises if revenue, have sell sales capabilities a to the to fiscal efficient higher very topline enhancing and have from project. conducted profitability topline provide from growing advantage some solutions see XXXX shift before I we we and sustainable believe our revenue opportunities. migrations cloud as we competitive this topline, to salespeople we not towards the solutions our with today's to that to mix to some continue us and look solutions non-solution contributions leverage sales. activities On cost extend training incremental our around in we started our first market reflecting to how color drive of retrain our building initiatives Beginning earlier are force year

we supply SAP of of and practice topline XX% IoT strong today our success consolidated of our existing opportunities force, project further Our for is of and to opportunities. solutions chain solutions key to SAP our expect over C/XHANA, factors, solution monitor two solution strategically sales topline XXXX was and cloud salespeople representative course clients. add headcount hybrids which current base to add areas. Complementing three S/XHANA new called to the comprised experienced our new is are

to pipeline We in around project are us opportunities through also deal partnerships. solutions momentum coming seeing our

and Intelligence. have is are an As we and learning clients are prospective this clients machine capability Bayestree opportunities example, an us, expand inquiring intelligence artificial deal in partnership contacting Existing with pipeline. to about which turn generating new our

and this demos several forward to completed outcomes XXXX. have positive We in look partnership from

very Another technology and the securing This implemented initial is RPA. several partnership is new automation at progressing award months. the is in or met with being UIPAS data. of This robotic solution well anticipate expansion project client next the we process

health We are met data's deployments. simultaneously solutions cultivating opportunities parent national RPA company UIPAS for with a additional provider

to as also the patient partnership significant sector enterprises of result us of levels, a only healthcare enterprises move through for the improve deployment opportunity satisfaction new a that As lines. patient UIPAS not prioritize but bottom technologies now long-term the represents experiences

deepening also our are SAP. We with partnership

business of is to SAP AmeriXXX the truest development growth. expanding the those contributions that of the in addressable have value SAPs we its sense increasingly in a and are new our bigger want SAP cloud For we a driving opportunity market increasing. piece word. you is to partner in SAP's the recognizes efforts

to with second compliance. partnership will decisions, We enhance capabilities are with their supply business areas better towards supply of journey time enables intelligent partnership include help chains digital formalizing clients differentiator build cross driven that this At enterprises functional as real competitive looking practice expand SAP's process and to our address enterprise that when in of SAP a their into us a chains a part our suppliers growth the the Ariba in turn I simplify to in time digital ecosystem. a management. migration are overall SAP in of And cloud premier partnership collaborate division fastest spend are I formalize to is to cloud call, our support the their to can SAP the the discussions us a that vendor mentioned conference three the top that that were growing we environments On advance majority This gives presence Google. class SAP the our of announce to now we mutual across partnership them. with cloud with one of world vendors segments of the quarter cloud. pursuing

from we’re – in cloud cloud platform, worked on for leader and private very, people So, that SAP SAP. Google have by are we also hybrid very their people cloud the overall and in hired being heavily and it encouraged very, many because this high they the with they it’s very SAP is investing some past very SAP from they insure intend level

are partnership this our with We path Cloud completed already to down not contributing the well formal we pipeline. have there yet are process although Google and deal

example the an was our as Cloud’s us has in fair such XXX topline. direct sales of result targets As company Fortune profile our say involvement company opportunity. elevated bringing success is to that to Google solutions new that adding last It we project this Fortune XXX a market our that insurance the is in month and risk, insurance recent secured

premier ability SAP necessary sales and both Cloud the a to pursuing Google to us this with further development partnership strong are in our position develop and secure as channels XXXX puts in believe sales evidences efforts. our to We our certification supplement

all first are proud secured XXXX. have our of to quarter we today. the performance summary, in expect of We certification operating In

one as to generating higher sustainable today that path and growth balance revenue quality sales and clean operating and with profitability. underpins sheet the higher are one platform a We force with

best to our please This growth remarks. of concludes strategy Operator, prepared the yet in are call questions. We much believe stages and the come. my open very to early is the we

Operator

session Robert Capital first from begin [Operator comes of Instructions] now question Brezza go ahead. will the question-and-answer Markets. Please The We Northland

Robert Brezza

into of the Hi. understand desire pipeline wanted to solutions that we Good you’re into pipeline talked translating you the your for higher-margin it selling P&L? prepared Brent, that remarks think obviously taking being the about revenue just moving morning. Thanks you How XX% seems and that because towards. on in about the P&L do my carries obviously. question. about the And that moving like the how dynamic think

Brent Kelton

the Rob, morning good and for Sure, the questions joining a thanks lot call.

topline business of bigger a is So mix, first want still to consider very as staffing the just costs also off the the certain mention I but the of becoming from that really gotten of of part we out we portions solutions to obviously, run especially lower own our clients mature strategic margin more their But projects. more have business. that and obviously of

look in in when I about so really QX if at as QX this through when in just think solutions mentioned look a at it even we good the the at point [indiscernible] the P&L margin. so And a standalone QX -- is QX topline indicator we you XX% gross or revenue generated

way the to guess really translate will look the deals into that those the So impact that which I will the just that’s best at have fall the we bottom margin out gross just P&L to on is as line.

Robert Brezza

standing You shift. trying to other seeing as are verticals I are your guess standout you the higher to mentioned drive sales. curious I What mix just insight the as healthcare solutions really after get going of or vertical. one are into was you

Brent Kelton

been us opportunistic the It's fashion. still across for - ones seeing the healthcare, is us we in and that far pipeline see most and retail most we've activity year technology, of what so for even this deal range that itself. been Sure, a and the have been the

in services think up-and-coming insurance financial the had. one we when that with With the I

that here but mentioned it Aflac. is mention opportunity company can that I the think I insurance I with

Robert Brezza

question Last from quack. me. Quack,

mentioned as some You salespeople well. additional hiring

how overall are In thinking you total perspective? from about terms headcount hiring of

Brent Kelton

want other and headcount other revenue the headcount to make specifically, are on almost on directly headcount the all Well, that than be investments sales the generates basically on make other consulting planning additions margins. to and the that billable would we most just headcount or side, headcount

we from strong much place and quite being solutions We delivery deals type the from solutions have the having SG&A a we that So scale platform add place. we complex a team headcount. for can the have without the to in complete perspective a in and on proposals able solutions that bit feel topline chase side

the be sales. main focused So, on additions would really

Robert Brezza

Got you. much. you Thank very

Operator

session. back conference for question-and-answer Instructions] [Operator remarks. would turn the concludes CEO like Brent This over I closing any our to to Kelton,

Brent Kelton

and everyone call our today. Thank attending you, Thank to and results. again I when quarter Barry report forward for you. speaking look thank year we Andrew full you with and our you XXXX fourth

Operator

is now Thank for The attending presentation. conference today’s you concluded.

You may now disconnect.