Champions Oncology(US:CSBR)2023-12-12 22:54Financial Data and Key Metrics Changes - The second quarter revenue was $11.6 million, a decline of 19% from the second quarter of fiscal 2023 [7] - The loss for the second quarter of 2024 was approximately $2 million, compared to a gain of $8,000 in the prior year [7] - Gross margin for the quarter was 43%, down from 49% for the same period last year [8] - Adjusted EBITDA loss was approximately $1.4 million for the quarter, compared to an adjusted EBITDA profit of $686,000 in the year-ago period [26] Business Line Data and Key Metrics Changes - The total cost of sales was $6.6 million, a decline of 9% compared to $7.2 million in the second quarter last year [8] - R&D expense was approximately $2.5 million, slightly down from $2.6 million in the year-ago period, with $1.2 million invested in drug discovery efforts [27] Market Data and Key Metrics Changes - Cancellations have receded back to historical levels, indicating a potential stabilization in the market [4][35] - The company noted a mixed outlook from pharmaceutical and biotech companies regarding budget planning for the upcoming year [16] Company Strategy and Development Direction - The company has made operational changes, including key hires and internal restructuring, to improve efficiencies and operations [4] - There is a focus on expanding the clinical biomarkers pipeline and ex vivo offerings to drive long-term revenue growth [23] - The company anticipates a gradual improvement in operational results, including revenue growth and profitability within the next couple of quarters [11] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about a return to revenue growth and profitability, despite recent revenue weakness [5][11] - The company is confident that bookings, a leading indicator of revenue, remain strong, and operational corrections are beginning to take effect [11][35] - Management acknowledged that while the environment is not as robust as a couple of years ago, it is better than the previous year, with larger pharmaceutical companies showing healthier budgets [16][37] Other Important Information - The company ended the quarter with $5.5 million in cash and no debt, with cash generated from operating activities of approximately $600,000 [28] - The company anticipates remaining in a generally cash-neutral position for the next quarter or two, with gradual acceleration expected towards the end of fiscal 2024 [10] Q&A Session Summary Question: Are cancellations broad-based or due to one or two large cancellations? - Management indicated that cancellations were broad-based and not due to one or two customers, reflecting an industry-wide trend [14] Question: What are the expectations from pharma and biotech companies for next year? - Management noted mixed feelings, with larger pharmaceutical companies showing healthier budgets compared to smaller biotech firms [16][32] Question: How is the company positioned for future growth? - Management expressed confidence in the company's robust bookings and operational improvements, indicating a positive outlook for returning to normal profitability and growth [35][40]