Anika Therapeutics, Inc. (NASDAQ:ANIK) Q2 2021 Earnings Conference Call August 5, 2021 5:00 PM ET Company Participants Mark Namaroff – Executive Director of Investor Relations and Corporate Communications Cheryl Blanchard – President and Chief Executive Officer Mike Levitz – Executive Vice President, Chief Financial Officer and Treasurer Conference Call Participants Yong Lee – UBS Jim Sidoti – Sidoti and Company Mike Petusky – Barrington Research Operator Good day, everyone, and welcome to Anika’s Second Qu ...

Company Overview - Anika is a joint preservation company focused on early intervention orthopedic care[5] - The company's 2020 revenue was $130 million, with $95 million in cash and investments as of March 31, 2021[5] - Anika aims to achieve diversified growth with a projected 2024 revenue mix of 64% in OA Pain Management and 30% in Joint Preservation[5] Market Opportunity and Growth Strategy - Anika is expanding its market opportunity from $1 billion to over $8 billion in joint preservation[12] - The company is targeting to double revenue by 2024 with double-digit adjusted EBITDA growth[12] - Anika has established a commercial footprint in over 75 countries[19] Financial Performance and Outlook - Q1 2021 total revenue decreased by 3% to $343 million compared to Q1 2020[34] - Joint Preservation and Restoration revenue increased by 55% to $122 million in Q1 2021[34] - Joint Pain Management revenue decreased by 24% to $193 million in Q1 2021[34] - The company had $946 million in cash and investments as of March 31, 2021[34]

Anika Therapeutics, Inc. (NASDAQ:ANIK) Q1 2021 Earnings Conference Call May 6, 2021 5:00 PM ET Company Participants Mark Namaroff - Executive Director of Investor Relations and Corporate Communications Cheryl Blanchard - President and Chief Executive Officer Michael Levitz - Executive Vice President, Chief Financial Officer and Treasurer Conference Call Participants Jim Sidoti - Sidoti & Company Mike Petusky - Barrington Research Operator Good evening, ladies and gentlemen, and welcome to Anika's First Quar ...

Financial Performance - Total revenue decreased by 3% to $343 million due to COVID-19 dynamics[12] - Joint Preservation and Restoration revenue increased by 55% to $122 million, primarily due to acquisitions and hybrid sales channel momentum[12] - Joint Pain Management revenue decreased by 24% to $193 million, impacted by COVID-19 and related ordering patterns[12] - The company holds a solid cash position with approximately $946 million in cash and investments[4] - Net income was $2838 million, or $020 per share[12, 20] - Adjusted EBITDA was $4783 million[12, 26] Future Outlook and Strategy - The company expects a second-half 2021 market recovery as COVID-19 restrictions lift[4] - The company is well-positioned for high single-digit to low double-digit revenue growth in 2021[14] - The company aims to double revenue by 2024 compared to 2019 base year results and achieve double-digit adjusted EBITDA growth[6, 14] - The company plans to expand its market opportunity from $1 billion to over $8 billion[6]

Financial Performance - Revenue for the three-month period ended March 31, 2021 was $34.3 million, a decrease of $1.1 million (3%) compared to $35.4 million for the same period in 2020, primarily due to the impact of COVID-19 on procedure volumes [105]. - Gross profit for the three-month period ended March 31, 2021 was $21.0 million, representing a gross margin of 61%, which included an increase in cost of revenue by $4.1 million due to acquisitions [107]. - Adjusted EBITDA for Q1 2021 was $4.8 million, a decrease of $4.7 million from $9.5 million in Q1 2020, primarily due to lower revenues from the COVID-19 pandemic [117]. - Adjusted net income for Q1 2021 was $752,000, down from $6.5 million in Q1 2020, reflecting lower revenues and increased expenses [120]. - Adjusted diluted EPS for Q1 2021 was $0.06, a decrease of $0.39 from $0.45 in Q1 2020 [123]. Expenses - Research and development expenses for the three-month period ended March 31, 2021 were $6.4 million, an increase of $0.3 million (5%) compared to the same period in 2020, primarily due to full quarter results from acquired companies [108]. - Selling, general and administrative expenses for Q1 2021 were $18.2 million, an increase of $3.7 million compared to Q1 2020 [109]. - A non-cash goodwill impairment charge of $18.1 million was recorded in Q1 2020, with no impairment charges in Q1 2021 [110]. Cash Flow - Cash used in operating activities was $2.4 million in Q1 2021, compared to cash provided of $1.0 million in Q1 2020, mainly due to lower sales and increased accounts receivable [125]. - Cash provided by investing activities was $1.7 million in Q1 2021, a significant improvement from cash used of $92.5 million in Q1 2020, attributed to prior acquisition costs [125]. - Cash, cash equivalents, and investments totaled $94.6 million as of March 31, 2021, down from $98.3 million at the end of 2020 [124]. Market Impact - The impact of COVID-19 has caused significant volatility in quarterly results due to the cancellation or delay of elective procedures [95]. - The company’s commercial operations have been affected by the pandemic, but it does not anticipate disruption to its ability to supply products [95]. - Revenue from the Joint Pain Management product family decreased by $6.2 million (24%) to $19.3 million, while revenue from the Joint Preservation and Restoration product family increased by $4.3 million (55%) to $12.2 million [106]. Strategic Growth - The company expanded its addressable market from over $1 billion in the global OA pain management market to over $8 billion in the joint preservation market through strategic acquisitions [92]. - The company is focused on high opportunity spaces within orthopedics, including osteoarthritis pain management and regenerative solutions [90]. - The company anticipates pursuing strategic inorganic growth opportunities, including potential partnerships and acquisitions, leveraging its strong financial foundation [94]. Tax and Valuation - The effective tax rate for Q1 2021 was (133.6%), compared to 21.4% in Q1 2020, primarily due to a $1.7 million tax benefit from the decrease in fair value of contingent consideration [111]. - A net benefit of $4.8 million was recorded in Q1 2021 related to the change in fair value of contingent consideration liabilities from acquisitions [111]. Financial Obligations and Risks - There were no material changes to the company's contractual obligations reported in the 2020 Form 10-K during the three months ended March 31, 2021 [129]. - The company may need to obtain additional funds through equity or debt financings if operational funds and existing capital resources are insufficient [130]. - The company does not use special purpose entities or off-balance sheet financing techniques that could materially affect its financial condition [131]. - There have been no material changes in the company's market risks or management of such risks in the first three months of 2021 [132].