Company's Long-Term Strategy to Launch New Products and Boost Revenue
2023-07-10
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Financial journalist report:
During the earnings call, Suthan Sukumar, Peter Brereton, and Mark Bentler provided an overview of the company's market outlook and discussed their plans for future growth. Despite the company's accomplishments, the management expressed uncertainty about how to boost the company's share price in the short-term. However, they outlined a long-term strategy to launch more products within the next year or two, which they believe will help improve the situation.
One positive development highlighted by the management was the expiration of the Lannett partnership with the Elite Financials revenues. This change is expected to have a positive impact on profitability as it will enable the company to have more control over their own destiny. With this newfound control, they aim to sell other products, not just the Amphetamine IR and ER, and generate additional revenue.
The management also emphasized the success of their product, Kirko. In just 12 weeks, Kirko generated twice as much revenue as a competitor's product did in an entire year. The management attributed this success to their active promotion and sales efforts, in contrast to the competitor's reliance on passive sales methods.
While the company expects revenue to increase, they acknowledged that profitability may be affected due to higher costs. The key drivers of the business, according to the management, are a strong demand environment, investments in sales and marketing, and investments in research and development.
Looking ahead, the company has plans for product and service expansion. They aim to introduce more products within the next year or two to improve their financial position and increase the share price. Additionally, following the expiration of the Lannett partnership, they intend to sell other products alongside Amphetamine IR and ER. The company is focused on actively selling their products to boost revenues and is even considering supplementing their product portfolio by selling products from other companies. However, expanding their product offerings may come with higher costs for the sales and marketing department, which could impact profitability in the short term.
The company's outlook for the quarter and year ahead is positive. They are aggressively pursuing their financial targets and focusing on sharpening brand plans and innovation pipeline. SKU rationalization has already resulted in improved gross margins, and the company expects further savings in fiscal '25 to fuel future initiatives. While the company maintained the EPS guide for the first half to decline by 20% to 30%, no other significant changes are expected in sales. In the second quarter, they plan to make growth investment spending, which may lead to a slight decline in EPS compared to the first quarter. However, the impact of wildfire dynamics on demand for air purifiers remains uncertain.
Overall, the earnings call provided insights into the company's market outlook and future plans. While the management expressed concerns about the stagnant share price, they outlined strategies to launch more products and explore partnerships. However, specific actions and progress on these initiatives were not discussed in detail during the call.
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