BioSyent Inc.

welcome to the Bioscience Inc Q2 and first half 2025 results presentation my name is Rene Gorham and I'm the president and CEO of the company before I dive into the presentation I just want to draw your attention to our forward-looking statements disclaimer and I'm likely to make some during this presentation so this presentation is being recorded and In the second half of August, I wanted to welcome you, if you're a first-timer, to this presentation. We do this on a quarterly basis. You'll find the link in our press release if that's not how you got here in the first place. And also, we often put out a commentary if there's a significant event in the company. We also do a similar thing. We'll typically link it in a press release if it's always required. If you are a shareholder or a frequent viewer, welcome back. We're recording this presentation, as I said, in the second half of August. So we not only have we had a good start to the year, which I'm going to speak about in a couple of moments, but we really are halfway through the third quarter and the business across the board on a Canadian pharma, international pharma and legacy basis is performing well. So that momentum that we've built up through the first six months of the year has carried on and you see good momentum as we work towards the latter part of the third quarter. So let's dive into revenue for the quarter. On a total company basis, revenue was just over $10 million, representing 14% growth to the year ago. Overall, Canadian Pharma had a record quarter. Our EBITDA was just under $2.8 million, 35% growth to the year ago, and on a NEAD basis, once again, also strong, over $2 million at 28% growth to the year ago. Of note here are the margins that we're earning on EBITDA and NEAT. You'll see 27% EBITDA margin and 20% NEAT margin. On a quarter, compares favorably if you trail back to the two previous years. These are actual quarter performance, so about $8 million in Q2 of 23, about $9 million in Q2 of 24, and just over $10 million this year. If we then look at a six-month basis, you see that growth trend looks even sharper if you trail back the last couple of years. So on a six-month basis, sales up 27% to the year ago, just over $21 million. And that was driven by growth right across the board from Canadian Pharmaceutical, International Pharma, and our legacy business. You see strong EBITDA performance up 40% to the year ago, just under $6 million today. And our NEAT performance also strong at 30% over the year ago at just over $4.3 million. EBITDA and NEAT margins strong at 28% and 21% respectively. And looking back at the growth over the last couple of years, you see strong performance both on revenue. So if we dive into the business units or the brands, you see in the quarter, Canadian pharma sales at $9.3 million. That was up 9% versus the year ago. And I won't go line by line, but you'll see a couple of notable things. Strong performance by Faramax and Tabela, and not such good results with a couple of the other products. Worth just calling out. Combagesic has... kind of been lagging our expectations now for some period of time. And Inafolic is an interesting one, and we experienced this with launch products. That product is still kind of considered a launch product in our portfolio. And you see down 9% in a quarter, up 94% on a six-month basis. So that does happen with launch products where you'll have kind of inventory builds throughout the course of the year, and that might distort a quarter performance. Repagine, down 13% in the quarter, but more or less flat for the year, which is below our expectation, but kind of in line. It's not a key promoted product for us. We do put our promotional effort against Fairmax and Tabela. GelClear, we have experienced some headwinds on that product, both on a quarter and a YTD basis. We are just launching four experience trials at cancer centers in BC, Ontario, Quebec, We're going to springboard off those real-world experience trials to determine what our promotional effort should be on this product. So we've pulled back somewhat on our promotional effort until those experience trials have been completed. So you'll see middling performance on the GelClear product as we go forward through the balance of the year. You see both the international and legacy business performing well, both on a quarter. So how does this then flow through to an earnings per share? What you see here is a chart showing trailing 12 months ending June 30th. If you go to the far right-hand side, that is the Q2 of 2025. Trailing 12 months earned $0.72 in that period of time, $0.18 in the quarter. If you compare that back to a year ago, trailing 12 months of $0.60, and then you can go back performance on the business, and that is, you know, coming from both revenue growth and our share buyback activity. So, very active in 23, 24, somewhat active in the beginning of this year, less active second quarter with NCIB, but that certainly has also contributed to EPS performance. Of note, the second quarter this year represented our 60th consecutive profitability A few things I'd like to touch on in terms of highlights on a YTD basis. We announced last September that we had acquired the Tobellia Global Business Placement Therapy, a product that we also commercialize in Canada. With that, we acquired a number of customers around the world. We started shipping that product in the first quarter. restocking and further shipments to both customers that we'd shipped to in the first quarter and additional customers. So year-to-date, we've generated $1.3 million of incremental revenue coming from the Tavalia Global business. You'll now see that featuring essentially on a quarterly basis, though. away from having to talk about an odd order pattern and shipping pattern with our international pharmaceutical business. We announced, as well, a dividend to be paid in September of $0.05. This represents an 11% increase over the 2024 dividend payment, so we've now paid dividends in March, June, and have announced the September dividend. So, overall, 11% up from the 2024 period, and that will continue to be a regular feature of our returning capital to shareholders. We've spoken for some period of time about the strong performance of Fairmax in the Canadian market is trusted by doctors and pharmacists and in fact by hundreds of thousands of patients, the majority of whom are women because the women are the main consumers and supplements in Canada. So we're at the number one recommended amongst the healthcare professionals that brand continues to perform well in the market. I already touched on NCIB activity down somewhat when you compare to previous years. But YTD basis, we've locked back 19,500 shares. I want to touch on trade and tariffs. I know that it's a hot topic really on both sides of the border in the United States and in Canada. I do get asked this from time to time. We've been reporting now since the first quarter. In Canada, there still remains a fair degree of uncertainty in terms of how proposed tariffs or what the arrangements will be between Canada and the United States. There is a trade agreement in effect. To date, we have had essentially no impact directly from any tariffs or tariff talk. We do not do much business into the United States. have a free trade agreement in effect. So we don't expect any impact on our business this year or obviously now thinking about 2026, 2027. We also do not know what the outcome will be of discussions and or negotiations that are occurring between Canada and the U.S. Historically, pharmaceutical products have traveled the world, not just between Canada and the United States, but have traveled the world tariff-free. There is some discussion about perhaps that changing. We do not sell pharmaceutical products into the United States, and so I would say any impact on us from tariffs will be counter-tariff, and that will be self-inflicted by the Canadian government, and we just don't know what that will look like, and it will play out over time. The other thing that we keep our eye on is what impact will tariffs and tariff talk have on Canadian consumers and the Canadian economy, and I'm not going to go into a big discussion about Performance of the Canadian economy and what I will say is that we have not seen any impact on our business and our brands in a material way on our business. Negative, positive. It's been kind of business as usual for us. We do promote premium priced products and a lot of our business is done to cash paying consumers. So that's something we keep our eye on. But as yet, no impact and we don't expect to do the balance of this year. We've already talked about Fairmax and its strong performance. It's now 10 years in a row the most recommended amongst pharmacists and physicians, and we are leveraging off of that performance and that trust that we've built in the Canadian market. We've been executing a Fairmax lifecycle strategy now for quite a number of years. We've reformulated the compound. We've reintroduced products with the new compound. We've launched new products. Fairmax 45 is a new product launched just over two years ago. It's still considered a launch product in the buy-a-sign vernacular, and that has been performing well. It's growing at high double-digit versus a year ago, and they certainly contribute in both incremental revenues and overall revenue performance for the Fairmax brand. We are preparing a new Fairmax product to be introduced into the market in 2026, and that will represent... overall across Canada. So, we have been busy over the last five years with innovation, product launches, and acquisition. That acquisition being the Tebellia Global Hormone Replacement Therapy product last September, which I've already spoken about it contributing out to revenue both in Q1 and Q2 of this year. So, as we kind of move off of that innovation and launch activity, What impact does that have on our business? And you can see that made reference to us becoming profitable in 2010. And you can see our portfolio has grown significantly. The products, brand tags that you see on the left-hand side above 2010 are the products we had in market in 2010. And on the right-hand side is what's in market today. This chart just shows you ending 2024. for that period of time. So we're working hard to diversify our portfolio and introducing innovative products into the Canadian market, but keeping an eye on making sure that we're managing a profitable business. So that eye on quality also translates into keeping an eye on return on equity. This chart shows you in the blue bars our cash position. Ending June 30th, you can see this year we're at just under $27 million, so in a range. a pretty tight range by design over the last several years. We managed that in a combination with NCIB activity, buying back shares and our dividends. In the trailing 12 months ending June 30th of 25, our cash from operations was $12 million. Of that, we've bought back $4 million worth of shares in those 12 months ending June 30th, and we've returned $2.2 million in the form of dividends to shareholders. So, net-net. That works out to a 23% return on equity. So strong performance, focused on quality, and working hard to grow the business and grow our diversity of our portfolio. Brings me to some comments about what our intentions are with respect to our strong balance sheet. I do get asked that question from time to time. And the easy answer is the first dollar that we're generating goes to revenue growth. So as we continue to invest in revenue growth, of years that we continue to grow the top line, deliver bottom line results, and diversify our portfolio. We are a capital light cash generating business. And even with seven new product launches in the last five years and the acquisition of Tabelia Global, we are in a strong position with respect to our balance sheet. So we've bought back almost dividend program in the fourth quarter of 2022 and returned $6.2 million to shareholders over that period of time. So we're now creeping up on $29 million return to shareholders, but with a strong business, with a growing top line, a growing bottom line, and an eye on continuing to move forward with new products and new innovations in the marketplace. I'd like to kind of work towards wrapping up the presentation today with a look at our, essentially our cap table. The reason I land on this, if you're new to the story, we have discontinued or paused use of share options as equity, a form of equity compensation in our business. We did that about five and a half years ago. I think the last option issued was in March of 2020. And we've replaced that with a restricted share unit program where we issue restricted share units and then we go into the open market using our strong balance sheet and we buy shares and hold those shares in trust. So you'll see here RSU shares held in trust of just over 214,000 shares and RSU's outstanding of just under 210,000. So those two match up fairly tightly and that's how we kind of maintain a tight cap table without being dilutive. And, you know, some people call that shareholder friendly. I call it just good common sense management. And we are shareholders, directors and management of BioSign are significant shareholders of the company. And so we're really focused on running a strong, profitable, growing business and delivering value on a per share basis over time. Thank you for your continued interest and support and look forward to you as the year progresses