NovaBay(US:NBY)2023-08-12 18:40Financial Data and Key Metrics Changes - Net product revenue for Q2 2023 was $4.6 million, a 26% increase from the prior year quarter, driven by record sales of wound care products [16][28] - Operating loss for the quarter was $1.4 million, a 37% improvement from the prior year [17] - Gross margin on net product revenue remained consistent at 50% for both Q2 2023 and Q2 2022 [16] - Cash and cash equivalents were reported at $4.4 million as of June 30, 2023, including proceeds from a $3 million private placement [18] Business Line Data and Key Metrics Changes - Avenova branded product sales amounted to $2.2 million, while DERMAdoctor product sales reached $1.1 million, and branded wound care products generated $1.3 million in sales [16] - Sales of DERMAdoctor products increased to $1.1 million for the quarter, up more than 40% versus the prior year, with notable contributions from international markets [7] Market Data and Key Metrics Changes - Avenova products achieved record sales during Amazon Prime Day, with a 22% increase over Prime Day 2022 and a 43% increase over Prime Day 2021 [30] - The physician dispense channel showed momentum, representing a win-win for the company and eye care specialists [29] Company Strategy and Development Direction - The company is shifting its focus in the DERMAdoctor line away from new product development to increasing sales of top-selling products through efficient sales channels [12] - The strategy aims for profitability by managing expenses and extending cash runway while focusing on proven products [20][32] Management's Comments on Operating Environment and Future Outlook - Management anticipates incremental growth in the eye care segment for the remainder of 2023, particularly through online sales channels [31] - The company is leveraging its digital marketing expertise to effectively promote products while managing expenditures [38] Other Important Information - Total operating expenses for Q2 2023 decreased by 8% over the prior year, including a 16% reduction in sales and marketing expenses [36] - The gross margin on net product sales increased to 55% for the first half of 2023 compared to 53% for the first half of 2022 [37] Q&A Session Summary Question: What was the actual cash loss for the second quarter? - The actual cash loss for the second quarter was about $1 million [22] Question: Can you discuss the wound business, specifically channels and SKUs? - The wound care segment consists of only two products, PhaseOne and NeutroPhase, with two sizes each [22] Question: What are the DERMAdoctor channels besides the direct website and Amazon? - The main sales channels include Amazon, dermadoctor.com, Costco, and international markets like the Middle East and China [23] Question: Any insights on margin expectations for the back half of the year? - Margins are expected to be around 55%, with slight increases due to the lower margin of wound care products [40]