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spk01: Thank you for joining us today. I'd like to introduce Celona Global, Medical Device Vice President of Capital Markets and Financial Communications, Jethro Rascuccio.
spk02: Thank you, Gretchen, and welcome to our fourth quarter earnings call for Celona Global Medical Device Corporation, listed on the TSX-V under the ticker SGMD. I'd like to remind everyone that today's discussion will include forward-looking information and statements. future-oriented financial information, and non-IFRS measures regarding future events and future financial performance. These statements reflect our views as of today only and should not be considered as representing our views for any subsequent date and, except as required by law, we do not assume any obligation to update the forward-looking statements provided to reflect events that occur or circumstances that exist after today, many of which are beyond our control. These statements are also subject to material risks and uncertainties that could cause actual results to differ materially from expectations reflected in the forward-looking statements. A discussion of these risk factors is fully discussed in Celona Global's disclosure documents filed on EDGAR and CDAR. During this call, we may also refer to certain non-GAAP financial measures. For information regarding our non-GAAP financials and a reconciliation of GAAP to non-GAAP measures, Please also refer to our EDGAR and CDAR filings. We intend to furnish a transcript of today's conference call in connection with our filing of a current report on Form 8K. There can be no assurance that any proposed acquisition will be completed, nor the timing of any acquisitions. Completion of any transaction will be subject to applicable director, shareholder, and regulatory approval. And finally, the statements made during this conference call are for general information purposes only and do not constitute a sale, offer for sale of, or solicitation of any offer to buy any securities in any jurisdiction. So without further ado, I'd like to introduce Celona Global Medical Device Corporation's Chairman and Interim CEO, Les Cross.
spk00: Thank you, Jethro. And thank you, everyone, for joining us on our call today. Last week, we posted our audited fiscal year financials ending February the 28th, 2022. As a reminder, we listed one year ago today, June 9th, 2021. In the nine months during the fiscal year we operated, we had a strong year with 113% revenue growth about which was 50% was organic growth. We grew gross profit by 140% during this period. As these financials prove, we are on track with our business plan. We are focused on serving a $30 billion market for products that help people recover from injuries, surgery, and physical disabilities known as recovery science. We penetrate this market through a proven approach The same approach I made with DJO Global, where I was the chairman and CEO and ultimately sold to Blackstone for $1.6 billion. Our primary strategy is acquiring companies that have not fully realized their revenue potential and marketing their products through our established sales channel that I have taken decades to develop as the CEO of DJO. We are in the very early stages of our plan. In fact, just one year into the plan. Our execution has been very solid since we launched Alona Global. We have made an average of one acquisition per quarter, and we saw organic growth post-acquisition in each of the deals we did. Because we are strategic in our early acquisitions, we have purposely created a fully integrated medical device company with several engines to drive revenue and profit growth. We have proven we have a deep pipeline for deals, for deal flow, where we can be picky about the companies we acquire. We target deals based upon their strategic fit into our overall strategy to build upon our existing fully integrated platform of businesses. We also get the benefit of the potential growth of revenues and profits upon closing these acquisitions as another growth engine. The second growth engine comes from product development. Because we have executed on our strategy to be able to innovate, produce and sell medical devices into the market, we now have a second prong of growth. We are working on several products that we can bring to the market in short order that can be developed, approved, produced and develop a strong return on equity. The foundation for this growth is a combination of businesses that we acquired last year. We have world-class innovation team in Simbex, a state-of-the-art US-based FDA-approved facility in SDP, and several sales channels we have acquired or developed in the past few months. A third engine of our growth is product IP acquisition. We acquired a portfolio of medical device product intellectual property just recently, giving us the ability to expand our product offerings into our channeled within weeks of the acquisition, providing another important engine for growth. I am optimistic that we have opportunity to find more deals like this in the coming quarters. Excuse me. Our fourth engine for growth is executing our product distribution deals through our sales channel. In May, we executed a distribution agreement with a laser company in Europe, enabling our current sales channel to offer additional large-ticket sales items to their product offering. We are actively negotiating several more of these deals. At DJO, I built a billion-dollar company. As a reminder, I was formerly the chairman and CEO of DJO Global, a company that I led from the early days, took public on the New York Stock Exchange, and laid the salt to Blackstone for $1.6 billion U.S. I grew that company by first creating a fully integrated device company, then picking superior products that I knew would sell in the international markets and niche US markets. I also picked products positioned to grow with the aging population and other favorable demographics. Since selling DJO, I have seen this market change. It has become even more fragmented through product innovation. Additionally, The large businesses that serve this market, such as DJO, can no longer achieve meaningful growth by acquiring dozens of small device companies. Understandably, they are trying to move into higher risk-reward opportunities that involve research and invention and require large capital investments. I believe these two forces have created a terrific opportunity to recreate my success at DJO. To fully take advantage of our opportunity, we have a talented, experienced team of executives and advisors that we have targeted as part of our acquisition or recruitment with experiences similar to this one. Luke Folsig, who is our chief operating officer, was the founder of SDP, our first acquisition, and he was a big part in helping build DJO. He has become our operational leader and with each month takes on a greater role in our success. We have added Rick Greenwald from Simbex, who worked to develop products for me at DJO. We've added Kenny Zisaltz and Scott Rogo, both sales executives with significant experience, and they spent time with me at DJO as well. We also have a well-known and talented M&A and capital markets team. led by the former chairman and vice chairman for patient home monitoring, PHM as it was known, is now two companies listed on the NASDAQ, ViaMed and Quip. Those companies grew out of an acquisition Jagannaut led by my M&A team. The entire team is engaged with great urgency to take advantage of this opportunity. Now that we've completed acquiring the building blocks for a fully integrated company, we are in position to make additional acquisitions in numerous markets, develop and sell our own products, acquire IP and execute distribution deals. I do want to remind every shareholder that we are able to accomplish this in just one year of operations. In this short time, we have had four solid methods to generate revenue and profits. In terms of our goal for the future, We expect to continue our rapid revenue growth now that we have more pathways to execute on. We plan to raise our gross profit margins this year by investing in higher margin products and acquiring higher margin businesses. We would like to get north of 40% gross margin as we develop our business, and I am confident as we grow, we can get to that scale. We will be able to achieve that. At the moment, We are in the very early stages of this plan, and I'm pleased to see our focus on raising gross margin is having an effect. Of course, we are still to focus on identifying and negotiating acquisitions of distribution channels in the next quarter or two, and that may temper this figure. But in the end, when we push our higher margin products through these channels, we will start realizing margins closer to our 40% target. I do want to add that we're fully staffed at our corporate level overhead point at this time, so each dollar of gross profit will translate into an increase in net profit. Please keep this in mind as we grow our business. We believe that our margins are primed to increase as we bring on more revenue. This is an early stage of a fast-growing business, and the fact that we have operational profit is fantastic. It speaks to our financial discipline and our focus on profitable acquisitions, as well as a laser-like focus on margins in general as we grow. We do have significant transaction costs. However, I view these as one-time expenses and a long-term investment. Over the next several years, as we aim to build our company with ever-increasing revenue, these upfront costs will become less and less material over time. We look forward to this fiscal year. We are well positioned to continue our revenue growth and increase our margins. Our goal is to make the next fiscal year even better than our first year in business. As I have mentioned, we have all the strategic building blocks of a fully integrated medical device company. We will continue to grow by acquisition, implementing our post acquisition organic growth plan, We will grow by product development. We currently have five products under development and we plan to introduce them to the market. We will grow by acquiring IP portfolios like the Electro portfolio we acquired in April. And finally, we will grow by executing distribution agreements like the K-Laser agreement we announced in May. We are also in a strong financial position to take advantage of this growing market. We have a strong balance sheet. We are operationally cash flow positive, and we can take down additional debt too. We have not secured any enterprise debt at the parent company level, which we can and we do have access to as we grow to finance further deals. This bodes well for us in 2022 and beyond. As for these newly announced potential acquisitions, we feel confident that we can finish due diligence and close them sooner thereafter. These two potential deals, if closed, will add about $23 million Canadian or a 55% growth in our run rate revenue. Additionally, they have higher gross margins than we currently report, which should lift our gross margins post-close. If we close, we feel confident that we can grow revenues post-closing as we have with our other acquisitions. Strategically, these companies fit well into our plan. In summary, we are in a market that is growing and relatively recession-proof. We have cash, no enterprise debt at the parent company. We are operationally profitable and have a strong pipeline of potential deals we believe we can do without tapping the equity markets. We are fully vertically integrated and we have four engines that we believe will drive this growth in the future. We are focused on being an earnings per share machine and now and into the future. With each passing quarter, our goal is growing earnings per share and this is at the center of our strategy. We have the team and the track record to do this. I know the capital markets are under pressure and we look to be one of those companies that's a must-have stock in 2022. While we are still small and under the radar, with a few more quarters of this type of growth, I think we'll be more and more noticeable to investors in Canada. I am confident that we will continue our growth and we can soon meet our internal goal of a U.S. listing. I look forward to our next update to our investors. I want to thank our investors for their partnerships Thank you, and I wish you a happy financial new year. With that, Gretchen, I'll turn the call over to you.
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