Zomedica Corp

fourth quarter 2024 financial results conference call. At this time, all lines are in listen-only mode. Following the presentation, we will conduct a question and answer session. If at any time during this call you require immediate assistance, please press star zero for the operator. This call is being recorded on Thursday, March 13th, 2025. I would now like to turn the conference over to Mr. Mike Valli from ICR. Please go ahead.

Thank you, Operator, and good afternoon, ladies and gentlemen. Welcome to Zamedica's fourth quarter 2024 earnings results and business update call. Joining me on today's call are Zamedica's Chief Executive Officer, Larry Heaton, Scott Jordan, the company's new Executive Vice President and Chief Financial Officer, and Mike Zelke, Vice President and Corporate Controller. Before we begin, we would like to remind everyone that on this call, we will be making various remarks about future expectations plans and prospects that constitute forward-looking statements. These forward-looking statements are based on assumptions, and there are risks that the results may differ materially from those statements. As such, Zomedica cannot guarantee that any forward-looking statements will materialize, and you are cautioned not to place undue reliance on them. We refer current and potential investors to the forward-looking information and risk factors sections of our public filings available on CDARplus at www.cdarplus.ca and on EDGAR at sec.gov. Forward-looking statements made on this conference call represents Zomedica's expectations as of today, March 13, 2025. I will now pass the call over to Zomedica's Chief Executive Officer, Larry Heaton. Larry? Thanks, Mike.

I'd like to start by thanking our shareholders for your support. Wishing prospective investors, analysts, and others a good afternoon. And welcome all to the Zometica fourth quarter and full year 2024 earnings results and business update call. Now today, instead of following our normal order, I'm going to start by addressing our recent delisting and our current market cap. Jeff Bezos coined the phrase, the company is not the stock and the stock is not the company. when Amazon shares fell 80% as the market adjusted in 2001, even while Amazon's operations were performing very well. I believe that our situation today reflects that. Our share price is under significant pressure, yet the company is performing well. As in each of the last 15 quarters, we're announcing today another record fourth quarter year over year. Markets are up, and we have over $70 million in liquidity. Your company is sound and is under no stress. So what's up with the share price? Well, as you know, in September of 2023, our share price fell below the 20 cent threshold for listing established by the New York Stock Exchange American. We were told then that we had until March 2024 to regain compliance, unless in the interim, the share price fell to an unacceptable level, in which case we would be immediately delisted. When we didn't rise above 20 cents by March 12, 2024, we discussed the situation with the exchange, and they told us that we could remain listed, essentially indefinitely, unless our share price fell to an unacceptable level. When the market fell over the last few weeks, our share price fell with it, ended up closing on March 3rd, at a level that the NYC American Exchange regulators determined was unacceptable. When it failed to open higher or climb the following morning, they halted trading and announced via a letter to us and a press release on March 4th, the suspension of trading and the commencement of delisting. Both Semetica and the NYC American Exchange issued press releases to inform shareholders on that day. A copy of the exchange's letter to us is included as an attachment to our annual report on Form 10-K filed this afternoon. Now, prior to our delisting, we identified the OTCQB Venture Market as the most appropriate option for our investors and ensured that trading would continue essentially uninterrupted as we transitioned to the new platform on March 5th with the new ticker symbol ZOMDF. We recognize that the share price fell considerably since we moved to the OTC QB market. While we can't pinpoint the exact reason for the decline, there was likely some selling from institutional investors who were unable or unwilling to hold OTC quoted stocks. In addition, we suspect that there were shareholders who moved out of their position due to speculation that the company is under distress. However, this couldn't be further from the truth. We are incredibly excited about the future at Zomedica. With the quality of our product portfolio, our commercial organization, and our manufacturing and distribution capabilities combined with the strength of our balance sheet, we believe we're very well positioned to deliver accelerating growth in the coming years as we move towards profitability. Investors who are currently buying or considering investment see the dislocation in value between our market cap and the values of Medicaid can create. They recognize what we've built over the past three and a half years and where we're headed. To that end, Zomedica investors, I'm sorry, Zomedica insiders who are heavily invested in the company have been restricted from trading since December 16th of last year. The window for some Medicaid insiders to trade will be open this coming Monday, March 17th, but we'll close again on March 18th due to the various insider trading rules. Now, I'll take questions on this topic after our prepared remarks, but for now, let me shift gears. and turn to an update on our recent operational performance, followed by a financial update from our Vice President of Finance and Corporate Controller, Mike Zelke, and comments from Scott Jordan, our new Executive Vice President of Finance and Chief Financial Officer, before opening the line for questions. The fourth quarter marked yet another period of solid execution across our business. We delivered revenue of $7.9 million for the fourth quarter, reflecting 8% growth over the prior year quarter. driven by year-over-year growth at both our therapeutic devices and diagnostic segments. This was the 15th quarter in a row that revenue set new quarterly highs, a trend that we expect to continue. The strong performance in the fourth quarter led to a full year 2024 revenue of $27.3 million, a record year for the company. Continued solid performance in our therapeutic devices segment, driven largely by our well-established leadership position with PulseVet, was bolstered by 76% growth year-over-year within our diagnostic segment, coming as a result of growing adoption of our novel diagnostic products, in particular, through FORMA and VetGuardian, which grew 65% and 95% year-over-year, respectively. 2024 was a significant year for Zematica, and the tremendous efforts across the organization set us up for success in 2025 and beyond. We made great progress within each of our key initiatives throughout the year to help drive growth and ultimately reach profitability. To review these, I'll start with a focus on commercial expansion. One of the most exciting commercial efforts we undertook during 2024 was international expansion. To take advantage of this opportunity, we focused on a two-pronged approach. First, increasing our regulatory approvals and key geographies. And second, growing our distribution network outside the U.S. With the receipt of CE marking for multiple products, including Trueforma, TrueView, and VetGuardian during 2024, our entire portfolio is now eligible to be sold into markets in the EU, as well as other countries that accept the CE mark. In addition, we materially expanded our global reach through the execution of multiple strategic partnerships with leading distributors in new international markets. In 2024, for example, we signed agreements to add distribution in Europe and the Middle East, as well as select other OUS markets. Having our entire product portfolio available for sale across the EU and other key geographies, as well as an expanded commercial footprint across key global markets, represents incremental revenue opportunities that we haven't had access to previously, and this should help drive top-line growth in the business. Beyond making our products more widely available on a global scale, we continue to aggressively grow our portfolio to expand the applicability of our novel technologies, as well as offer additional benefits to pets and the veterinarians that care for them. Now, PulseSight remains our leading product, but we believe its benefits can be even more widely utilized across a variety of indications and pets. We continue to focus on developing clinical data related to new indications for use, paving the way for new opportunities beyond the technology's historic applications and customer base. Turning to Assisi, while there was some choppiness in the performance of this product line during 2024, We are excited that many of the one-time headwinds experienced have been resolved, and we are now well positioned for solid performance in 2025. We've continued to develop new product offerings, including the new Equilobe device for horses, which we launched in December, and our next generation Loop Lounge that we expect to launch yet this quarter.