In This Article:
Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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Else Nutrition Holdings Inc (BABYF) reported a 5% year-over-year revenue growth for Q3 2024, reaching $1.8 million.
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The company is actively working on securing non-dilutive long-term financing to enhance marketing efforts and operational needs.
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Else Nutrition Holdings Inc (BABYF) has implemented cost-cutting measures, resulting in a 12% decrease in operational expenses year-to-date.
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The company is expanding its retail footprint, with a successful pilot in Costco Canada stores and advanced discussions with a major US retailer.
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Online sales channels, particularly Amazon.com and Walmart.com, continue to be significant contributors to the company's revenue.
Negative Points
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Revenue declined sequentially due to timing delays in orders from key large retail partners.
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Limited marketing budgets have restricted the company's ability to generate consumer demand and brand awareness.
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The company's gross profit for Q3 2024 was negative, mainly due to conservative inventory write-offs.
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Else Nutrition Holdings Inc (BABYF) is facing challenges with FDA approval processes, which remain uncertain and costly.
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The company is still working towards achieving profitability, with a break-even target set for the end of 2026.
Q & A Highlights
Q: Can you provide an update on the FDA? A: While we are limited in what we can say beyond what we have publicly disclosed previously, I can say we are actively engaged in efforts to move these discussions forward and obtain a more definitive answer from the FDA on how to proceed. While the time frame to which this is completed is vague, we are optimistic in our approach and our ability to fill an unmet need for families. The process of filing a formal notification is a multistep one containing data and safety of the ingredients, availability of the protein, and clinical growth study. This is done by a series of animal and clinical studies. The FDA has yet to approve the submitted data and the study protocol. Moreover, the FDA itself is now reconsidering the required data for approving new infant formula as part of its discussions following the infant formula crisis and shortage faced starting in 2022.
Q: How is the business in Canada doing? A: We are progressing very fast in the last few weeks in Canada. Main highlights are the launch this summer of the kids ready to drink in 850 Loblaw stores and the kids ready to drink trial recently started in 10 plus Costco Canada stores.