LogicMark Q2 2023 Earnings Report

LogicMark EPS Results

• Actual EPS: -$45.75
• Consensus EPS: N/A
• Beat/Miss: N/A
• One Year Ago EPS: N/A

LogicMark Revenue Results

• Actual Revenue: $2.33 million
• Expected Revenue: N/A
• Beat/Miss: N/A
• YoY Revenue Growth: N/A

LogicMark Announcement Details

• Quarter: Q2 2023
• Date: 8/10/2023
• Time: N/A
• Conference Call Date: Thursday, August 10, 2023
• Conference Call Time: 4:30PM ET

LogicMark (NASDAQ:LGMK) provides personal emergency response systems (PERS), health communications devices, and Internet of Things (IoT) technology that creates a connected care platform in the United States. The company's devices provide people with the ability to receive care at home and age independently and to check, manage, and monitor a loved one's health and safety remotely. It also manufactures and distributes non-monitored and monitored personal emergency response systems, which are offered through the United States Veterans Health Administration (VHA), direct-to-consumers, healthcare durable medical equipment dealers and distributors, monitored security dealers and distributors, and its ecommerce website logicmark.com and Amazon.com. The company was formerly known as Nxt-ID, Inc. and changed its name to LogicMark, Inc. in March 2022. LogicMark, Inc. was founded in 2006 and is based in Louisville, Kentucky.

LogicMark Q2 2023 Earnings Call Transcript

[Operator]

Good day and thank you for standing by. Welcome to LogicMark's Second Quarter 2023 Financial Results and Corporate Update Conference Call. At this time, all participants are in a listen only mode. After the speakers' presentation, there will be a question and answer Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Pierre Dubois with Investor Relations.

[Operator]

Please go ahead.

[Speaker 1]

Well, thank you, Norma, and good afternoon to everyone, And thank you also for participating in today's conference call. Joining me from LogicMark today are Shylen Simmons, Chief Executive Officer and Mark Archer, Chief Financial Officer. During this call, management will be making forward looking statements, including statements that address LogicMark's expectations for future performance or operational results and anticipated product launches. Forward looking statements involve risks and other factors that may cause actual results to differ materially from those statements. For more information about these risks, please refer to the risk factors described in LogicMark's most Recently filed Annual Report on Form 10 ks and subsequent periodic reports filed with the SEC as well as LogicMark's press release that accompanies this call, particularly for the cautionary statements in it.

[Speaker 1]

The content of this call contains time sensitive information that is accurate only as of today, August 10, 2023. Except as required by law, LogicMark disclaims any obligation to publicly update or revise With that, It's my pleasure to now turn the call over to Shailene.

[Speaker 2]

Thank you, Pierre, and welcome to everyone joining us today. I would like to start by thanking our employees for their tireless efforts as we continue to build LogicMark into a leading solutions provider for the care economy. Our team is relatively new, but we have much to be proud of. You'll see from our 2nd quarter results So we were again able to sustain a 60% plus gross margin level for another consecutive quarter. In fact, our 2nd quarter gross margin of 69% is the highest level reported in the last 10 quarters.

[Speaker 2]

This is partly due to improvements in our supply chain logistics and we're also looking for other operating efficiencies. But keep in mind, we are still very focused on building, testing and releasing new products, which will grow our top line. Speaking to product releases, I'm very excited to announce that we are expecting to launch a new product called Freedom Alert Plus, The first since most of the new team was hired last year and for the legacy company, the first new product in 8 years. The new Freedom Alert Plus is a wearable device that introduces fall detection, instant connection to caregivers and a touch screen design which is unique to the PRRS industry. By incorporating a more sophisticated device In our Care Village software platform, we can offer valuable additional features, helping to transform us from a mere reactive technology into a predictive technology and a more comprehensive health communications product.

[Speaker 2]

With this new generation of LogicMark products, We can now capture the needed data to monitor our customers' well-being in real time using artificial intelligence and machine learning to optimize the best care. These systems utilize various sensors, algorithms, and machine learning techniques to analyze movement patterns, usage and other relevant data to accurately predict the likelihood of a fall occurring. Accurate assessment of fall detection has been lacking in the Perris market for some time, and our team is tackling it head on with our R and D efforts and innovative solutions through our proprietary and care platform as a service or CPaaS Ecosystem. CPaaS utilizes the LogicMark Care Village Software Platform, Our new suite of connected services. The platform includes our proprietary device operating system, Cloud based services and Cara Village app, which can be accessed on both iOS and Android devices.

[Speaker 2]

The new LogicMark devices will offer automatic updates. This permits us to continuously optimize our fall detection for our customers. It also allows us to add new features, ensuring sustainability by providing customers with our most innovative features at all times. For example, we'll be incorporating a medicine reminder in one of our upcoming product releases. The user can program alerts for the various prescription medicines they are taking.

[Speaker 2]

Our aim is to make the feature accessible Freedom Alert will be available through our government, business to business and direct to consumer channels. This includes the LogicMark Amazon store, which we launched in late March, to help increase our direct to consumer distribution. We're continuously working on making our direct to consumer channels operate more efficiently so that we can capture additional market share. We're excited about our role in providing additional products in the marketplace to serve the aging population. A recent article by U.

[Speaker 2]

S. News and World Report summarizes their survey and indicates a strong desire for the 55 A few of the highlights include, for the first time ever, there will be more older adults in the United States than children in the upcoming decade. By 2,034, the U. S. Census Bureau project suggests that there will be 77,000,000 people aged 65 and over compared to 67,500,000 under the age of 18.

[Speaker 2]

While the decision to adopt the medical alert system can be difficult one for some seniors, nearly all 96% who use it says it brings them comfort according to their Senior Safety and Connectedness survey. The survey similarly found that 97% of users' children say that medical device systems that their parents utilize provides reassurance compared to having no proposed device. When using assistive or health related technologies, people 55 and older say that things that matter the most Separately, in a recent report published by CB Insights on state of digital health, care delivery and navigation text as well as health data So it's just a few more proof points that we are on the right path with our target market and the work we're doing At this point, I'd like to hand over the call to Mark for some comments on the financials.

[Speaker 3]

Yes. Thank you, Shai Lynn. Our second quarter results Include a gross margin of 68.7 percent on revenues of 2,300,000 This compares to a gross margin of 59.5 percent on revenues of $3,400,000 for the same period last year. We're always looking for ways to improve margins through productivity, better supply chain management, Efficiency improvements and cost reduction programs. As an example, we've been able to return to transpacific shipping As opposed to using air freight from our Asia based contract manufacturers and the air freight can be 4 to 5 times as expensive as shipping over the ocean, so the savings is substantial.

[Speaker 3]

The decrease in year over year revenues Was due to one time sales of our 911 plus 4 gs units last year that replaced 3 gs units, which the national cellular networks announced in 2022 they would no longer support. In the case of our 3 gs units less than 2 years old, we elected place those units at our cost, which the Veterans Administration Healthcare System greatly appreciated. As you're aware, the VA has been our most significant And enduring customer. As Shai Lynn mentioned, we're still focused on building out The new product pipeline and ramping up our sales. During the quarter, operating expenses rose $748,000 or 24% compared to the same period last year.

[Speaker 3]

Specifically, The increased operating expenses relate to the start of online advertising to support our direct to consumer sales effort, Additional personnel in the sales department and one time expenses relating to the special shareholders meeting held in April and the reincorporation into Nevada that was done in June. Net loss attributable to common shareholders For the Q2 was $2,300,000 compared with a net loss of $1,200,000 in the same period last year. On a fully diluted basis, our net loss per share was 1.83 Compared to a net loss of $2.50 a share last year. The net loss per share improved over prior year because of Reverse stock split on both our common and preferred shares, which was required to maintain compliance with our continued listing on the NASDAQ Stock Exchange. On May 8, we were notified by NASDAQ that we were in full compliance with their listing requirements.

[Speaker 3]

From a liquidity standpoint, We ended the 2nd quarter with a cash balance of $7,600,000 compared to $7,000,000 at the end of calendar 2022. I also would just like to mention that we finished Bringing our accounting function in house this quarter. We have been outsourcing with a third party. We believe this move will strengthen our internal controls, improve our financial reporting process

[Speaker 1]

Well, I think, Norma, we can go ahead and kick off Q and A. Mark, did you have any comments You want to hand the call over to her?

[Speaker 3]

Yes, I'm sorry. Did we not hear any of that?

[Speaker 1]

Sure. Yes, we heard it all. I think you had a closing statement before you wanted to hand it over. So just didn't know if you wanted to

[Speaker 3]

I guess, I just wanted to say that I'm pleased with the progress so far and with the product pipeline Filling up, I think we'll see a lift in our revenues beginning later this year.

[Operator]

And at this time, I'd like to hand the conference back to Shailene Simmons for closing remarks.

[Speaker 2]

Thanks to all of you for taking the time to listen today. We appreciate your support and we look forward to keeping you updated on our progress.

[Operator]

This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone, have a wonderful