Release Date: April 24, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Hi, Jess. So not such a bad quarter, but I'm not sure you can answer this question, but what were the general terms of the settlement with BASF?
A: Hi, Ron. At a high level, we've agreed to continue developing our Solesence business and ensure no violations of our agreements. We've also agreed to keep a supply available as mandated by the contract and to work on new products for them. There were no monetary aspects to the agreement.
Q: Were there any monetary aspects of the agreement payments?
A: No, there were no monetary inducements involved in the settlement with BASF.
Q: Good morning, gentlemen. Congratulations on a great quarter. Can you confirm if it's business as usual post-settlement with BASF, and could you clarify the gross margins targeted for 2024?
A: Thank you, Tony. Yes, it's essentially business as usual. We've codified some ongoing practices and addressed mutual concerns through the settlement. Regarding gross margins, we are targeting 35% to 40% for the full year 2024.
Q: Can you provide details on the $40 million backlog mentioned? Is that primarily Solesence or does it include other products?
A: The $40 million includes both shipped and open orders, with a significant portion scheduled for Q2 and some for Q3 and Q4. Solesence makes up about 80% of our revenue, so it represents the majority of this backlog.
Q: How has the settlement impacted your financials, particularly legal fees?
A: The legal fees for the BASF litigation were significant, with about $1.3 million in 2023 and $0.4 million in 2022. With the settlement, we expect reduced legal expenses moving forward.
Q: What are the key operational improvements made this quarter?
A: We've made significant strides in inventory availability and throughput, which have directly improved our production and revenue. Our inventory availability reached over 95%, and throughput improved consistently throughout the quarter.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
