BioSyent Inc. (TSXV:RX) has announced its Q4 and Fiscal Year 2023 results, showcasing a record-breaking quarter for its Canadian pharmaceutical business, as well as a strong finish to the year.
The company reported an 11% increase in quarterly sales, reaching just under $8.3 million, and a 13% increase in annual sales, totaling nearly $32 million. The EBITDA margin remained stable, while the net income after tax (NIAT) margin saw a slight increase. The fourth quarter marked BioSyent's 54th consecutive profitable quarter, with fully diluted earnings per share (EPS) rising to $0.12 from $0.09 in the prior year.
Key Takeaways
- Canadian pharmaceutical business grew by 10% in Q4 and 13% for the full year.
- International business experienced volatility but showed a 53% increase on a full-year basis.
- EBITDA margin remained stable at 20%, with NIAT margin increasing from 16% to 18%.
- Fully diluted EPS for Q4 increased to $0.12, up from $0.09 year-over-year.
- The company launched new products, including Gelclair and Inofolic, and increased its dividend by 12.5%.
- BioSyent continued its share buyback program, purchasing over 93,000 shares under its NCIB.
- Cash position remains strong at just under $29 million, with zero debt.
Company Outlook
- Expectations for growth are centered on new product introductions and existing products like FeraMAX and Tibella.
- The company is working on additional acquisition and in-licensing opportunities to diversify revenue streams.
- BioSyent anticipates improved operating profit and profit contribution from brands in 2024 and beyond.
Bearish Highlights
- The international business showed a decline of 54% in Q4, though it is best measured on a full-year basis due to the lumpiness of large orders.
Bullish Highlights
- The FeraMAX brand continues to be the most recommended oral iron supplement in Canada.
- The company is increasing the points of distribution for its new chewable iron supplement, FeraMAX 45.
- Named to the 2024 TSX Venture 50 top-performing companies in the Clean Tech and Life Sciences category.
Misses
- The company noted negative revenue growth figures for Combogesic due to promotional testing, but expects improvement moving forward.
Q&A Highlights
- No specific Q&A highlights were provided in the summary.
BioSyent Inc. has demonstrated a strong financial performance in both the fourth quarter and the full year of 2023. The company's strategic launches, dividend increases, and share buyback activities reflect a commitment to growth and shareholder value. With a solid cash position and a focus on expanding its product portfolio, BioSyent is poised to continue its positive trajectory in the coming years.
InvestingPro Insights
BioSyent Inc. has shown commendable financial resilience and growth potential, as highlighted in its recent earnings report. To provide a deeper understanding of the company's financial health and investment potential, let's consider some key metrics and InvestingPro Tips.
InvestingPro Data shows a robust Market Cap of 74.24M USD, indicating a stable company size within its sector. The P/E Ratio stands at a reasonable 15.95, suggesting that the stock might be reasonably valued in the current market, especially when considering its P/E Ratio (Adjusted) for the last twelve months as of Q4 2023 is 16.22. This is complemented by a PEG Ratio of 0.71 for the same period, which could imply that the company's earnings growth is not fully reflected in its share price.
Moreover, BioSyent's Gross Profit Margin of 81.03% in the last twelve months as of Q4 2023 is a testament to its operational efficiency, and a strong signal to potential investors about the company's ability to manage its costs and maintain profitability.
InvestingPro Tips that could be especially relevant for investors include the fact that management has been aggressively buying back shares, which is often a sign of confidence in the company's future by its leaders. Additionally, BioSyent holds more cash than debt on its balance sheet, providing a solid liquidity position that can support ongoing operations and growth initiatives.
For those interested in further insights, there are additional InvestingPro Tips available, which can provide a more comprehensive analysis of BioSyent's financial health and investment potential. Remember to use the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription at InvestingPro.
With these insights, investors can make more informed decisions and keep a closer eye on BioSyent's performance as the company continues to navigate through its growth phase.
Full transcript - Biosyent Inc (BIOYF) Q4 2023:
René Goehrum: Hello and welcome to the BioSyent Inc. Q4 and Fiscal Year 2023 Results Presentation. My name is René Goehrum and I'm the President and CEO of the company. I want to start the presentation today by just giving you an overview of our sales by brand and business unit. You can see here the Canadian pharmaceutical business grew 10% in the quarter ended December 31st and did just under $8 million which represented an all-time record for the business. And for the full year, we were just under $30 million, up 13% to the year ago. You can see on a by-brand basis for the most part, both in the quarter and on the full year, we had strong growth, particularly Tibella which was up 36% in the quarter and 46% on the year. I will note that Combogesic has kind of negative revenue growth figures here. We did some work around promotional testing that had an impact on the top line. And I would just direct you to kind of what we expect those numbers to look like as we go forward through into 2024. And I don't expect the same look in terms of business results in the marketplace. Overall, we've been talking about our international business being quite lumpy. That has continued. You can see on the quarter down 54% but on a full year basis, up 53%. That business is concentrated into a handful of markets for which we receive and process and ship large orders. And as a result, best to measure that business on a full year basis. We have been filling the order book and expect that business to continue to progress. The legacy business had a strong fourth quarter and for the year ended flat to the year ago. So overall, company sales reached just under $8.3 million for the quarter, up 11% to the year ago. Our EBITDA margin was relatively flat, 20% to the year ago, 21% NIAT margin up slightly from 16% to 18%. On a full year basis, you can see our sales reached just under $32 million, up 13% to the year ago. We've already talked about the strong performance in the Canadian pharmaceutical business. It represented a record quarter, obviously, a record year as well for Canadian pharma. We reshaped the portfolio a couple of years ago and have nicely gone through making up the loss in revenue that we had for the products that we returned to partners and have returned the business to a solid growth as we move forward. On a full year basis, you can see that our EBITDA margin was 25% as a ratio to sales and just under $8 million, up 7% to the year ago. And our NIAT margin consistent with the year ago at 20% and that represented a growth of 18% versus a year ago, just under $6.5 million of net income after tax. So how does this flow through to a quarterly look on earnings per share? I would like to just point out the fact that the fourth quarter represented our 54th consecutive profitable quarter. For the quarter itself, we did $0.12 on a fully diluted basis and that compares favorably to $0.09 in the year ago period. Overall, on our TTM which in this case, represents fiscal 2023, we did $0.53 per share compared to 44%. So solid up over 20% year-on-year measuring EPS. So if we go back to 2010 which is the first year that we had a profitable quarter in the middle of that year, we had our first profitable quarter. We've -- and operating our business profitably. Since then, we've been investing in in-licensing and launching new assets. You can see back in 2010, we have 2 brands on market. That included our legacy business. On the far right of your screen, you can see all of the products and brands that we have in market today. On a full year revenue basis, 2023, as I've already indicated, just under $32 million in sales, progressing over time. We've added to the portfolio and we've grown our profit over that period of time. And then at the bottom of the screen, just to kind of point out bottom right corner, fully diluted shares outstanding at the recording of this presentation in the second week of March under 12 million shares fully diluted and that compares favorably to 2010 when we first came profitable. So though we've been investing in the business and we have a substantially larger business, larger commercial footprint and capacity and capability, a larger portfolio, measurably more profitable business, we've done that and reduced the fully diluted shares outstanding over that period of time. So I'd like to just speak to a couple of highlights for the fourth quarter of 2023. We launched Gelclair and started shipping it in the quarter. We launched menopauseinformation.ca in partnership with the Canadian Menopause Society. This is a website to provide information, education to women that are experiencing menopause symptoms and menopause itself and also to direct them to some options for treatment and how to prepare and consult with healthcare practitioners. In the quarter, we delivered our fifth consecutive dividend. In this case, it was a $0.04 dividend that was paid in December and we bought back over 93,000 shares under our NCIB. Subsequent to the quarter end, we declared an increase to our dividend, a 12.5% increase. So from $0.04 to $0.045 per quarter and that first increased dividend will be paid on the 15th of March coming up. In February, BioSyent was named to the 2024 TSX Venture 50 top-performing companies on the TSX Venture Exchange in the Clean Tech and Life Sciences category. We launched a new corporate website if you haven't taken a look. I invite you to do so at biosyent.com. And we continued under our NCIB in buying back shares. In this case, just under 123,000 shares have been purchased since January 1 until the recording of this presentation. Our lead asset, FeraMAX brand has been the most recommended oral iron supplement in Canada for 8 years and I don't think I'd be letting too much out of the bag by telling you that we fully expect over the coming months to be telling you that it is 9 consecutive years. This is an independent survey done on the self-medication or OTC products amongst physicians and pharmacists. And this has given us a strong platform in which to build a life cycle strategy for the FeraMAX brand. We've been working on this for a number of years and executing on it now since late in 2020. I'm not going to go over much of the detail on this slide, you can pause it. The thing that I would point out is that we launched the latest FeraMAX product, that's FeraMAX 45 about a year ago and that business has been progressing well. I've got a couple of more comments on it in a couple of slides. And we are working on the next FeraMAX product, it's in development. I don't have much to say on that at this point in time. But we have a new asset that we expect to see market upon regulatory approval and completed development. As I mentioned, we are progressing with FeraMAX 45. We are increasing points of distribution. You'll find it in the pharmacy close to you in Canada. This is a Canada-only launch at this phase. It's a chewable iron supplement that also has Vitamin B12 and Vitamin C and it's positioned to maintain iron health for those patients and consumers that cycle in and out of iron deficiency and iron deficiency anemia. The product is, as I say, available now across the country and we're growing distribution literally in the hundreds of pharmacies on a monthly basis. In August of 2023, we launched Inofolic, a new treatment option for women with Polycystic Ovary Syndrome. I invite you to visit the product website inofolic.com. It's still very early days on this product. I mentioned a few moments ago that we had launched Gelclair and this is an oncology supportive care product to help patients manage side effects from radiation and chemotherapy, essentially mouth and throat that really have a severe impact on quality of life and for patients to continue that medication. So this product was launched just in November, so even earlier days than Inofolic. So we look forward to reporting to you over time how we're doing on these new product introductions. So these products that I've just outlined for you, together with the existing in-market FeraMAX products and coming FeraMAX products and Tibella, are hormone replacement therapy product to constitute the bulk of what our expectation is for growth over the next several years. So growth drivers, not just in 2024 but '25 and '26. We are working on additional acquisition and in-licensing opportunities and enhanced focus on acquisitions, so in-market assets that are revenue generating but we do have a few assets in either negotiation or diligence at this stage and we expect to be able to share more about that as the year progresses. So how has our business performance affected our cash balance. You can see here on this slide, we're showing you cash balance ending December 31 for '21, '22 and '23. And our average return on equity is represented by the green line. So you can see through the slide that our cash position at year-end has been fairly consistent now for 3 years. I've spoken earlier in this presentation about how we're generating cash in our business or operating a profitable business. Last year, our cash from operations was $5.1 million. And we've been actively managing this by investing in the business. We've launched new assets which I've spoken about. Those assets are contributing to revenue growth in the company. And the profit growth, we expect that investment to continue going into '24. I would think that ratios that we've come to expect in terms of operating profit and profit contribution from brands as we get through 2024, will improve over time. And I think into 2025, those ratios will improve. Nevertheless, we've been generating cash from operations and profitability and we've been returning that capital to shareholders. So we bought back $3.1 million worth of shares last year and we paid dividends of $1.9 million. So essentially, we've returned the cash generation from 2023 back to shareholders. We expect to continue, obviously, both dividends and our buyback program, as we have done through the first quarter of this year. We expect those 2 will continue to feature in our strategy as we move forward. So let me revisit that approach and how we're linking our capital allocation to our strategy. Our cash position is strong at just under $29 million. We have zero debt. Our first dollar of cash generation or cash that we have on the balance sheet goes to drive growth in the business. We have been investing when you do a deeper dive and take a look at our investments in sales and marketing and other OpEx elements. You'll see that we're investing in growth in the business and we are clearly diversifying the revenue streams with new assets in marketing. So our third use of capital is to return that to shareholders and to make sure that we're doing that and leaving an ample amount of capital on the balance sheet to drive our strategy. So just over 5 years ago, we started buying back shares. We've repurchased 2.7 million shares since the end of 2018 for an enhancement in earnings per share of 23%, so for those shareholders which we've had -- we have many, a lot of shareholders have been with us for an extended period of time. Those shareholders have seen their EPS enhanced by 23% through share buybacks. And of course, we've now returned including the dividend that's being paid this week, $2.9 million through dividend payments back to shareholders. So we're growing a substantial business, managing the bottom line and returning capital to shareholders. So we're working on managing all 3 of those. I don't want to spend too much time on this table. I'd like to just remind listeners and viewers to this presentation that we have replaced share options as an equity element in our compensation with RSUs, restricted share units. And we do this because we feel the way we manage that is less dilutive. We buy back shares in the open market, all them and trust to satisfy our future obligations under the RSU plan. So it's been over 4 years since we've issued any new share options. So very non-dilutive and shareholder friendly. And the reason we're focused on being shareholder friendly is because employees, management and directors are significant shareholders of the company. We own in aggregate about 25% of the company. I believe 80% of our employees are also shareholders in the company. So we keep an eye on these measures, the cap table, the balance sheet and ensuring that we're growing a strong, healthy business as we move forward. I look forward to reporting our progress to you as the year progresses. You'll next hear from us after our Annual General Meeting which is mid-May. Thank you.
End of Q&A:
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