In This Article:
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Revenue Growth: 50% for the quarter and 62% year to date.
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First Six Months Revenue: $874,000 compared to $538,000 in 2023.
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Evolve Product Line Sales: 59% of total sales.
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Gross Margin: 54% for the quarter, up from 47% last year; June gross margin at 67%.
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Adjusted EBITDA: Reduced to about $500,000 a month from over $1 million historically.
Release Date: August 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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SenesTech Inc (NASDAQ:SNES) reported a record top-line sales growth of 62% year-to-date compared to the same period in 2023.
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The Evolve product line, launched at the beginning of the year, now accounts for 59% of total sales and is approved for sale in 44 states.
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The company has successfully pivoted to a distribution model, targeting larger orders and reducing selling costs.
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SenesTech Inc (NASDAQ:SNES) has active agreements in 11 countries, expanding its international market presence.
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Gross margin improved significantly, reaching a record high of 67% in June, indicating better cost management and profitability potential.
Negative Points
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Despite the growth, the company is still not profitable and is working towards achieving cash flow breakeven next year.
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The transition to profitability is heavily reliant on securing large orders from major retailers, which are not guaranteed.
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The company faces challenges in penetrating the retail market due to long buying decision cycles.
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There is a dependency on state approvals for product sales, which can delay market entry.
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The company is negotiating a new facility lease, which could increase operational costs if not managed carefully.
Q & A Highlights
Q: Could you comment on any recent large city orders? A: Joel Fruendt, Chief Executive Officer, mentioned that SenesTech recently received a large order for Evolve from Hartford, Connecticut. They also expect an order from Newark, New Jersey, and a distributor has placed a large order for Boston area municipalities.
Q: Can you elaborate on your advances in packaging? A: Joel Fruendt explained that Evolve for rats is offered in various sizes, including pouches and pails. They are transitioning to pouches to reduce plastic usage, launching a 6-pound economy size pouch that reduces plastic packaging by 87%.
Q: Can you elaborate on one or two big orders that could take you to profitability? A: Joel Fruendt provided examples, such as warehouse stores ordering one pail per store, potentially generating $5 million in revenue. Big box retailers ordering one case per month could result in an annual rate of over $4 million. They are pitching to 23 multi-location customers, representing over 50,000 locations.