Milestone Scientific (NYSEAM:MLSS) Q3 2025 Earnings Call November 14, 2025 08:30 AM ET Company ParticipantsDavid Waldman - Head of Investor RelationsEric Hines - CEOKeisha Harcum - VP of FinanceConference Call ParticipantsBruce Jackson - Equity Research AnalystNone - Analyst 1None - Analyst 2Anthony Vendetti - Senioe Healthcare AnalystOperatorGreetings and welcome to the Milestone Scientific third quarter 2025 financial results and business update call. At this time, all participants are placed on a listen- ...

Core Viewpoint - Lutai A (000726.SZ) emphasizes that energy costs constitute a significantly lower proportion of total product costs compared to raw material costs, and the company is leveraging rooftop solar power to supplement electricity consumption [1] Group 1: Cost Structure - Energy costs are a smaller portion of the overall product costs compared to raw material costs [1] - The company utilizes rooftop solar power as a means of resource reuse for electricity generation [1] Group 2: Operational Efficiency - The thermal power project ensures a stable supply of steam for the company [1] - The company reported a comprehensive gross margin of 23.17% for the first three quarters [1] Group 3: Future Strategy - The company plans to continue enhancing cost management and expanding market reach [1] - There is a focus on continuously improving profitability [1]

Financial Data and Key Metrics Changes - For the First Quarter of fiscal 2026, consolidated same-store sales increased by 0.9%, driven by pricing actions and improved execution at the salon level [4] - Adjusted EBITDA for the first fiscal quarter was $8 million, up from $7.6 million a year ago, reflecting a $400,000 improvement [4][14] - Total First Quarter Revenue was $59 million, an increase of 28% or $12.9 million compared to the prior year [11] - GAAP Operating Income increased to $5.9 million, up from $2.1 million in the year-ago quarter [13] - Cash From Operations was $2.3 million, a $3.6 million improvement compared to a use of cash by operations of $1.3 million in the prior year [16][17] Business Line Data and Key Metrics Changes - Same-store sales for Supercuts were up 2.5% for the first fiscal quarter, with loyalty program participation growing from 36% to 40% [4][5] - Adjusted EBITDA for the Company-Owned Salon Segment improved by $1.9 million year-over-year to $1.6 million for the quarter [15] - Adjusted EBITDA for the franchise segment decreased by $1.6 million to $6.4 million, primarily due to lower royalties and fees [15] Market Data and Key Metrics Changes - The company experienced a net decrease of 757 franchise locations compared to the previous year, with approximately 300 related to the Align salons that converted from franchise to company-owned [12] - The performance gap between closed stores and top-performing units was approximately $350,000, indicating strong potential within the system [12] Company Strategy and Development Direction - The company is focused on the holistic transformation of the Supercuts brand and optimizing sales and profitability in its company-owned salon portfolio [3] - Key initiatives include enhancing operational performance, reinforcing brand leadership, and driving technology and digital acceleration across the business [8] - The company is piloting brand-specific initiatives to strengthen performance across its portfolio [8] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the progress made in improving profitability and generating positive cash flow [9] - The company anticipates a meaningful increase in unrestricted cash generated from core operations compared to fiscal year 2025 [17] - Management is encouraged by the signals that their actions are taking hold, indicating a positive trajectory for the company [10] Other Important Information - The company has received questions regarding the potential to refinance existing debt, indicating that current economics do not support such a move in the near term [21] - The company expects G&A expenses to be in the range of $40 million-$43 million for the year, including G&A associated with the Align transaction [37] Q&A Session Summary Question: Can you provide more details about pricing actions and their impact on traffic? - Management indicated that franchisees have begun to take further pricing actions based on a competitive pricing survey, with no significant changes in traffic trends observed [23][24] Question: Can you talk about traffic trends at Supercuts and Smart Style? - Management noted improvements in traffic trends at Supercuts, while acknowledging opportunities for improvement at Smart Style [26] Question: Regarding store closures, should we expect a reduction in closures this year? - Management confirmed that closures have reduced by half compared to the previous year, but did not provide specific guidance on future closures [31] Question: Can you provide insight into G&A for this year? - Management expects G&A to be in the range of $40 million-$43 million, including G&A associated with the Align transaction [37] Question: What is the status of the CEO search? - Management anticipates a decision on the CEO search in the coming months, with the interim CEO actively engaged in the process [42]

Core Insights - Peloton Interactive, Inc. (PTON) reported first-quarter fiscal 2026 results, with earnings and revenues exceeding expectations, although revenues declined year over year while earnings increased [1][4][10] Financial Performance - Adjusted earnings per share (EPS) for Q1 was 3 cents, surpassing the Zacks Consensus Estimate of breakeven earnings, compared to breakeven EPS in the prior-year quarter [4][10] - Quarterly revenues reached $551 million, exceeding the consensus mark of $541 million by 1.8%, but reflecting a 6% decline year over year [4][10] - Connected Fitness segment revenues were $152.4 million, down from $159.6 million in the prior-year quarter, while subscription revenues were $398.4 million, down from $426.3 million [5] Operating Metrics - Peloton had 2.73 million Ending Paid Connected Fitness Subscriptions, a 6% decline year over year, with an average net monthly churn of 1.6% [6] - The company registered 542 thousand Peloton App subscribers, reflecting a net decrease of 8% year over year [6] Margin Performance - Operating expenses decreased by 17% year over year to $242.4 million, while gross profit totaled $283.7 million, down 7% year over year [7] - Gross margin contracted by 30 basis points to 51.5%, attributed to a $13.5 million inventory accrual related to Bike+ seat-post costs [7] - Subscription gross margin improved by 80 basis points to 68.6%, while Connected Fitness Products margin decreased by 230 basis points to 6.9% [7] Adjusted EBITDA - Adjusted EBITDA for the quarter was $118.3 million, up 2% year over year, exceeding management's guidance by $18 million due to lower operating costs and improved execution [8][10] Balance Sheet & Cash Flow - As of September 30, 2025, Peloton held $1.10 billion in cash and cash equivalents, an increase from $1.04 billion at the end of fiscal 2025 [11] - Net debt decreased to $395.1 million from $777.3 million in the prior-year period [11] - Net cash provided by operating activities was $71.9 million, up from $12.5 million in the prior-year quarter, while free cash flow was $67.4 million compared to $10.7 million previously [12][11] Outlook - For Q2 fiscal 2026, Peloton expects revenues between $665 million and $685 million, indicating a slight year-over-year growth at the midpoint, with paid connected fitness subscriptions projected to decline by 8% [13] - The company anticipates fiscal 2026 revenues between $2.4 billion and $2.5 billion, reflecting a 2% year-over-year decline at the midpoint, with adjusted EBITDA expected to rise by 12% year over year [15]

Investment Rating - The report maintains a neutral investment rating for Saudi Basic Industries Corporation (SABIC) [1][2]. Core Insights - The market is expected to have a neutral reaction to SABIC's Q3 2025 performance, with adjusted net income slightly below consensus expectations, offset by strong performance in the agricultural nutrients segment [1][2]. - SABIC reiterated its capital expenditure guidance for FY 2025 in the range of $3-3.5 billion and highlighted the expected production start of its integrated complex in China next year [1][2]. - The petrochemical segment is facing capacity oversupply issues, which the company has reaffirmed [1]. Summary by Sections Latest Developments - SABIC's revenue for Q3 2025 was 34.33 billion SAR, below consensus expectations, primarily due to weak performance in the petrochemical business and a decline in licensing revenue, partially offset by strong agricultural nutrients performance [2]. - The adjusted EBITDA was 5.561 billion SAR, also below market expectations, reflecting weak petrochemical product prices, although mitigated by cost control measures [2]. - The company reported a significant impact from cost and value creation initiatives, estimating a $300 million effect on EBITDA for FY 2025, with a Q3 impact of $119 million [2]. Project Progress - SABIC reported that its growth projects are progressing well, including the early production of the Petrokemya MTBE plant and the completion of 87% of the integrated complex in China, expected to start production in H2 2026 [2]. - The Ibn Zahr LTRS-1 project has also been launched, aimed at improving feedstock utilization and reducing the carbon footprint [2]. Segment Performance - The petrochemical segment's adjusted EBITDA was slightly below expectations due to weak methanol and polyethylene prices, as well as ongoing oversupply of ethylene glycol [2]. - Conversely, the agricultural nutrients segment outperformed expectations, driven by rising urea prices, contributing positively to overall revenue [2].

Investment Rating - The report assigns a rating of "Outperform" for the company, indicating an expected total return exceeding the relevant market benchmark by more than 10% over the next 12-18 months [10]. Core Insights - The company reported a net income of $28 billion for Q3 2025, surpassing consensus expectations by 10% due to better-than-expected revenue and lower costs [2][4]. - Revenue for Q3 2025 was $111.5 billion, which is 18% higher than consensus estimates, driven by increased production in the upstream segment [2]. - The company has raised its natural gas sales capacity target from over 60% to approximately 80% by FY2030, with total gas and liquid production expected to reach 6 million barrels of oil equivalent per day by the end of the decade [1][2]. Financial Performance Summary - The company achieved a free cash flow of $23.6 billion in Q3 2025, up from $15.2 billion in Q2 2025 and $19.2 billion in Q1 2025 [2]. - Operating costs decreased by 6% quarter-on-quarter and 17% year-on-year, contributing to improved profitability [2]. - The company maintained a dividend payout of $21.1 billion for Q3 2025, consistent with previous quarters, and expects total dividends for FY2025 to reach $84.6 billion [3]. Capital Expenditure and Projects - The company reaffirmed its capital expenditure guidance for FY2025, estimating between $52 billion and $58 billion [2]. - Key projects, including the Jafurah Phase 1 and Tanajib gas plant, are on track for completion by the end of 2025 [2].

Financial Data and Key Metrics Changes - The company reported consolidated net revenue of $36.3 million, a 6% increase year over year, driven by higher cannabis flower sales in Israel and higher cannabis extract sales in Canada, partially offset by a decrease in cannabis flower sales in Canada [11] - Gross profit and adjusted gross profit in Q3 were $18.3 million, equating to a 50% gross margin, a 19 percentage point improvement from 31% adjusted gross margins in Q3 2024 [11] - Adjusted EBITDA in Q3 was $5.7 million, an improvement of $11.7 million year-over-year, driven by higher gross profit and lower operating expenses [12] Business Line Data and Key Metrics Changes - In Canada, flower supply constraints led to softer flower revenue year over year, but this was offset by strong performance in edibles and significant growth in the vape category [4] - The Spinach brand ended the quarter as the number two cannabis brand in Canada with 4.5% overall market share, ranking fourth in flower with 4.9% share and third in vapes with 7% share [5] - In edibles, Spinach held the number one position with 19.7% market share, and within gummies, it led the market with 22.8% share [6] Market Data and Key Metrics Changes - In Israel, Cronos Group achieved record net revenue, with Peace Naturals being the number one medical cannabis brand, driven by strong demand for flagship strains [8] - The medical patient count in Israel has returned to growth in 2025, up nearly 5% year to date [9] - International market results were lighter this quarter due to shipment timing, with expectations for the second half of 2025 net revenue to be similar to the first half [9] Company Strategy and Development Direction - The company remains focused on delivering top-line growth, margin expansion, and disciplined cost management while strengthening operations for sustainable profitability [4] - The completion of the phase two expansion at GrowCo is expected to improve flower sales in 2026, resolving supply constraints [5] - Cronos Group maintains a strong balance sheet with no debt and $824 million in cash, providing flexibility for growth and innovation [10] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's strategy and highlighted the strong performance of core business segments, anticipating continued growth into 2026 [15] - The company is optimistic about the impact of the Groco expansion on revenue and margins, with expectations for improved capacity utilization over time [17][19] Other Important Information - The company launched new products, including limited-edition seasonal offerings and new strains in Israel, to maintain consumer engagement and retail momentum [7][8] - The company is monitoring potential regulatory changes in Germany that could affect future market dynamics [9] Q&A Session Summary Question: Did any sales from Groco expansion occur in Q3, and what is the expected growth magnitude for 2026? - Management indicated that sales from Groco would gradually show up, with a 70% capacity increase on flower expected to impact revenue positively in 2026 [17] Question: Will underlying gross margins improve with the new Groco capacity? - Management confirmed that increased fixed cost absorption from the new facility could lead to improved margins in the future [18] Question: How much did flower supply constraints impact Q3, and what about shipment timing for international markets? - Management acknowledged that flower supply constraints weighed down performance, and shipment timing shifts would normalize, making the second half of the year similar to the first half [20][21]

Financial Data and Key Metrics Changes - Second quarter revenue was $327 million, reflecting a 5% reported revenue decline, while year-to-date revenue was $649 million, also down 5% [4] - Adjusted EPS increased 13% in the quarter to $1.27 and 11% year-to-date to $2.36 [16] - Adjusted gross margin reached 60.5% in the second quarter, up 380 basis points year-over-year [12] - Adjusted operating income increased 5% in the second quarter to $87 million, with adjusted operating margin expanding 250 basis points to 26.7% [15] Business Line Data and Key Metrics Changes - Hospital revenue was $146 million in the second quarter, up 5% on a reported basis and 4% organic [5] - Blood management technologies grew 12% in the quarter and 13% year-to-date, driven by hemostasis management [5] - Plasma revenue was $125 million in the quarter, down 10% on a reported basis, but organic revenue grew 19% [8] - Blood center reported revenue declined 18% in the quarter, but organic revenue grew 4% [10] Market Data and Key Metrics Changes - U.S. plasma collections grew in the high single digits, while European collections continued to grow in double digits [9] - The company raised its full-year plasma revenue guidance to a decline of 4%-7% or 14%-17% organic growth excluding CSL [9] - Hospital revenue growth guidance was updated to 4%-7%, reflecting sustained growth in blood management technologies [8] Company Strategy and Development Direction - The company is focused on advancing its portfolio and transformation to sustain momentum beyond its long-range plan [4] - Strategic priorities include meeting debt obligations, returning excess cash to shareholders, and advancing targeted investments in growth products [20] - The company aims to strengthen execution in interventional technologies to accelerate growth and margin expansion beyond FY 2026 [8] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the sustained robust growth of the plasma therapeutics market, particularly immunoglobulins [9] - The company anticipates continued margin expansion in the second half of the fiscal year [16] - Management highlighted the importance of disciplined execution and a high-performance culture in driving long-term value creation [20] Other Important Information - The company raised its full-year revenue guidance from a reported decline of 3%-6% to a decline of 1%-4% [11] - Free cash flow guidance was raised to $170-$210 million, with a commitment to maintain a free cash flow to adjusted net income ratio in excess of 70% [18] - The company ended the quarter with $296 million in cash and total debt of $1.2 billion [18] Q&A Session Summary Question: What are the assumptions for collections growth in the second half? - Management indicated that the second quarter was driven by share gains, innovation pricing, and collections volume growth, with high single-digit growth in the U.S. and double-digit growth in Europe expected to continue [23][24] Question: Can you provide an update on IVT commercial efforts? - Management noted that hospital business was the largest contributor to margin expansion, with a focus on blood management technologies and actions to regain growth momentum in IVT [26][27] Question: How is the launch of the HN cartridge going in EMEA and Japan? - Management expects the launch to be a significant source of sustainable double-digit growth, although market dynamics differ from the U.S. [54][56] Question: What is the outlook for the Vascade business? - Management expressed confidence in regaining share in the competitive market, with ongoing initiatives to strengthen the sales force and improve market acceptance [40][45] Question: How will share repurchases impact EPS? - Management indicated that share repurchases contributed a few cents to EPS, and they aim to keep dilution in check while being opportunistic with capital deployment [39][71]

Financial Data and Key Metrics Changes - The company reported revenues exceeding $250 million, adjusted EBITDA over $160 million, and DCF approaching $104 million, with strong margins and consistent utilization resulting in an improved leverage ratio of 3.9 times and a DCF coverage ratio of 1.6 times [6][11][12] - The net income for Q3 2025 was $34.5 million, operating income was $83.9 million, and net cash provided by operating activities was $75.9 million [11] Business Line Data and Key Metrics Changes - Average pricing per horsepower reached an all-time high of $21.46, reflecting a 1% increase sequentially and a 4% increase year-over-year [11] - Average active horsepower remained stable at 3.55 million, with total fleet horsepower at approximately 3.9 million, consistent with the previous quarter [11][12] Market Data and Key Metrics Changes - The company expects active horsepower in the Northeast and Central Regions to grow by over 40,000 horsepower before the end of 2025 compared to Q2 [8] - The company has contracted 300 small horsepower units to increase utilization to nearly 80% over the coming months [9] Company Strategy and Development Direction - The company plans to deploy most of its 2025 new unit horsepower in Q4, setting the foundation for continued momentum in 2026 [7] - The 2026 capital budget is being finalized, with expectations that new horsepower will exceed 2025 levels due to continued natural gas demand and new projects [7][8] - The company is focused on cost management and operational discipline, leading to increased guidance for EBITDA and DCF for 2025 [6][13] Management's Comments on Operating Environment and Future Outlook - Management noted that U.S. producers are evaluating macro market conditions for their 2026 capital budgets, but growth opportunities remain in the markets they operate [7] - The company is optimistic about the path forward, citing successful ERP implementation and cost synergies from a new shared services model [15] Other Important Information - The company refinanced its ABL and 2027 senior notes, significantly reducing weighted average borrowing costs and improving strategic flexibility [10][14] - The company expects to realize over $10 million in annualized interest savings from recent refinancing efforts [14] Q&A Session Summary Question: Can you speak to your willingness to lean further into compression and dry gas plays in a sustained slowdown in oil-directed activity? - Management indicated they are already established in dry gas markets and can move equipment as needed to support growth in those areas [17][18] Question: Can you speak to recent pricing dynamics and how spot prices compare to your fleet average? - Management noted that pricing trends have picked up since Q2, and they expect dollar per horsepower revenue to remain consistent into the back half of 2025 and into 2026 [20][21]

Core Viewpoint - The company emphasizes the impact of aluminum prices on its procurement and sales strategies, highlighting the importance of cost management and innovation to maintain profitability amid market fluctuations [1] Procurement Insights - The primary raw material for the company is aluminum rods, with prices influenced by upstream aluminum ingot prices, which are subject to volatility as a bulk commodity [1] - The procurement pricing model follows "aluminum ingot market price + processing fee," referencing publicly available prices for "A00 aluminum" from Changjiang Nonferrous and Guangdong Nanchu [1] Sales Strategy - The company's battery box products are customized and non-standard, leading to a lack of a standardized market price due to varying customer requirements in functionality, material type, appearance, and other parameters [1] Cost Management - The company places a high priority on cost management and will closely monitor the impact of aluminum price fluctuations on its performance [1] - Strategies to control costs and maintain gross margins include optimizing the supply chain and improving production efficiency [1] Innovation and Growth - The company is committed to continuous technological innovation and expanding into high-quality sectors to ensure stable operations and performance improvement [1]