So I went back to the transcript and pulled this out. Joe say between the 15th-19th, but I'm not sure if that is December and maybe he is talking about January since that is when we need to uplist by.
Moderator: And we will take our next question from John Brown. Your line is now open.
Joe Moscato: Hey, John.
John Brown: Hi, thank you. With all of the acquisitions, is there any comment on forecast, revenue forecast or bottom line forecast for next year?
Joe Moscato: Not yet. I mean those are coming. Obviously, we have to around the 15th to 19th, we have to put up some performers for the revenueing business that we have acquired. Our finance team is now doing all the necessary work to put those filings out. I mean I cans say that on a, on the Veneto assets, that company this year, you know, we paid on slightly over four times EBIDTA to the business. So figure adjust the EBIDTA for about 7.6 million after everything was said and done, you know, paid over 100 employees, all those expenses. So the business has done considerably higher over the last three years. Some years have been much, much higher. But you know, as reimbursement, as drugs go in and out of the system, more money is made, less money is made. So the whole, the real goal here is to expand within the full 27 states. Then you know, if one state has a bad year on reimbursement or two do, it really doesn't hurt you. That's where the high growth trajectory of this business is, and this business has spent millions and millions of dollars on its infrastructure and all of its systems and, you know, we are quite proud to have this business, as well as help grow it over the next year into those 27 states.
Generex Conference Call Dec. 3, 2018
Page 24 of 27
John Brown: Wow, thanks. A potential $7.6 million EBIDTA just from one of the acquisitions is pretty darn exciting. I appreciate it being conservative and not jumping into a forecast. Is there any goal that the management team has in mind trying to achieve in the next year or two?
Joe Moscato: Yes, create a billion-dollar company just in NuGenerex distribution solutions within the next 27 states. The quicker we get there, the higher the revenue and the sooner we will be able to fund a lot of the things we want to do on our own. So you know, it's all about execution there. You know, that team is working very, very hard. It went from three states by the time we acquired the business last month, moving into four additional states since we have acquired it over the last four or five weeks. So the goal here again is to get into all 27 states as quickly as possible, become a highly compliant, highly effective, highly efficient platform in all of those states, and revenue will come. Forecasts will start soon. But right now, it's been you know, getting through in our first major phase of the plan, which is to make all of the acquisitions we have had queued up, you know, get in there. Terry Thompson and his team have fully gone in and integrated a lot of the systems to Generex and you know, maybe it would be good. Terry, if you would, why don't you comment on what you good folks have been doing there in Texas and Dallas and you know, since we have acquired and what your plans are with this business are,
Terry Thompson: Thanks, Joe. Well, we have implemented the state expansion where we are reviewing which states to expand into as opportunities arise. We are trying to move from the current platform to a total of what looks like 27 states with the MSO model. But we are also looking at other products to offer through the MSO model and we are looking at product outside the MSO model. We just started our first two contracts. We are signing two contracts with our DME IQ business, which is outside of the MSO model, which could be used in any of 50 states. So that's the beginning of that. WE are also preparing to take over our other acquisition that Joe mentioned to integrate that which has a lot of synergy which would allow us to do other types of programs and alterative distribution channels. It will also allow us to start up other companies such as chronic care management and other disease protocols, with a much larger platform between the two companies put together. It will be worth more together than alone by working together. The MSO model Veneto Group that we acquired as an example, does not service Medicare patients in the MSO models. It's strictly commercial and its compliant whereas one of these other acquisitions wee are looking at is, in fact, in the Medicare business with the significant size of their company dedicated to Medicare types of payers and products to those populations. The MSO model does have the physicians within the ownership group, do have a large significant amount of Medicare patients that could be serviced, but not through our model. So we think by putting the companies together, that we are going to be able to service a much larger population of patients that we currently have access to on both sides of the model. I think that's about as good of an overview as I can give at this time.
Generex Conference Call Dec. 3, 2018
Page 25 of 27
Joe Moscato: Well, thanks, Terry. I appreciate that. I hope that answered your question.
John Brown: Well, it was a simple question about revenue forecasts to see what I could get out of you and I think you guys did a pretty good job answering it the best that you could. I will just finish maybe with a comment. I don't know if it generates any further conversation, but it seems like most biotech's don't really have a revenue model. They are strictly research. It seems like you have differentiated yourself a little bit, for instance with the MSO acquisition, than some of the typical biotech's that just have a portfolio of research.
Joe Moscato: Well, look at you know, I like to say that we are kind of many but going to be a, you know, a Medco Merck, you know, or Merck Medco. So you know, Terry Thompson was president of Merck Medco and you know that business went on, Medco, to be now what we all Express Scripts. So for us, I like that model. It allows us not to constantly dilute shareholders. It allows us to make our own money. It allows us to be able to fund our own initiatives. It allows us to do our own development, our own clinical work. Again, this business, as well as the other one we are auditing, will significantly allow us to pay for our own initiatives, especially when we expand and get the growth trajectory that this, that these businesses will allow. That's that 27 states that we are going to grow into as quickly as possible. So I don't want to really get into forecasting yet until the numbers are done from the finance teams. But you know, I could tell you that both business have been sizable, not only in the past, but will continue on being sizable into the future. Our hope is to grow these two-billion-dollar business, you know, over these 27 states within the next year to a year and a half.
John Brown: Thank you. I really appreciate your answer. Thank you.
Joe Moscato: Thank you. Thank you very much for the question.
Moderator: And we will take our next question from John Brown. Your line is now open.
Joe Moscato: Hey, John.
John Brown: Hi, thank you. With all of the acquisitions, is there any comment on forecast, revenue forecast or bottom line forecast for next year?
Joe Moscato: Not yet. I mean those are coming. Obviously, we have to around the 15th to 19th, we have to put up some performers for the revenueing business that we have acquired. Our finance team is now doing all the necessary work to put those filings out. I mean I cans say that on a, on the Veneto assets, that company this year, you know, we paid on slightly over four times EBIDTA to the business. So figure adjust the EBIDTA for about 7.6 million after everything was said and done, you know, paid over 100 employees, all those expenses. So the business has done considerably higher over the last three years. Some years have been much, much higher. But you know, as reimbursement, as drugs go in and out of the system, more money is made, less money is made. So the whole, the real goal here is to expand within the full 27 states. Then you know, if one state has a bad year on reimbursement or two do, it really doesn't hurt you. That's where the high growth trajectory of this business is, and this business has spent millions and millions of dollars on its infrastructure and all of its systems and, you know, we are quite proud to have this business, as well as help grow it over the next year into those 27 states.
Generex Conference Call Dec. 3, 2018
Page 24 of 27
John Brown: Wow, thanks. A potential $7.6 million EBIDTA just from one of the acquisitions is pretty darn exciting. I appreciate it being conservative and not jumping into a forecast. Is there any goal that the management team has in mind trying to achieve in the next year or two?
Joe Moscato: Yes, create a billion-dollar company just in NuGenerex distribution solutions within the next 27 states. The quicker we get there, the higher the revenue and the sooner we will be able to fund a lot of the things we want to do on our own. So you know, it's all about execution there. You know, that team is working very, very hard. It went from three states by the time we acquired the business last month, moving into four additional states since we have acquired it over the last four or five weeks. So the goal here again is to get into all 27 states as quickly as possible, become a highly compliant, highly effective, highly efficient platform in all of those states, and revenue will come. Forecasts will start soon. But right now, it's been you know, getting through in our first major phase of the plan, which is to make all of the acquisitions we have had queued up, you know, get in there. Terry Thompson and his team have fully gone in and integrated a lot of the systems to Generex and you know, maybe it would be good. Terry, if you would, why don't you comment on what you good folks have been doing there in Texas and Dallas and you know, since we have acquired and what your plans are with this business are,
Terry Thompson: Thanks, Joe. Well, we have implemented the state expansion where we are reviewing which states to expand into as opportunities arise. We are trying to move from the current platform to a total of what looks like 27 states with the MSO model. But we are also looking at other products to offer through the MSO model and we are looking at product outside the MSO model. We just started our first two contracts. We are signing two contracts with our DME IQ business, which is outside of the MSO model, which could be used in any of 50 states. So that's the beginning of that. WE are also preparing to take over our other acquisition that Joe mentioned to integrate that which has a lot of synergy which would allow us to do other types of programs and alterative distribution channels. It will also allow us to start up other companies such as chronic care management and other disease protocols, with a much larger platform between the two companies put together. It will be worth more together than alone by working together. The MSO model Veneto Group that we acquired as an example, does not service Medicare patients in the MSO models. It's strictly commercial and its compliant whereas one of these other acquisitions wee are looking at is, in fact, in the Medicare business with the significant size of their company dedicated to Medicare types of payers and products to those populations. The MSO model does have the physicians within the ownership group, do have a large significant amount of Medicare patients that could be serviced, but not through our model. So we think by putting the companies together, that we are going to be able to service a much larger population of patients that we currently have access to on both sides of the model. I think that's about as good of an overview as I can give at this time.
Generex Conference Call Dec. 3, 2018
Page 25 of 27
Joe Moscato: Well, thanks, Terry. I appreciate that. I hope that answered your question.
John Brown: Well, it was a simple question about revenue forecasts to see what I could get out of you and I think you guys did a pretty good job answering it the best that you could. I will just finish maybe with a comment. I don't know if it generates any further conversation, but it seems like most biotech's don't really have a revenue model. They are strictly research. It seems like you have differentiated yourself a little bit, for instance with the MSO acquisition, than some of the typical biotech's that just have a portfolio of research.
Joe Moscato: Well, look at you know, I like to say that we are kind of many but going to be a, you know, a Medco Merck, you know, or Merck Medco. So you know, Terry Thompson was president of Merck Medco and you know that business went on, Medco, to be now what we all Express Scripts. So for us, I like that model. It allows us not to constantly dilute shareholders. It allows us to make our own money. It allows us to be able to fund our own initiatives. It allows us to do our own development, our own clinical work. Again, this business, as well as the other one we are auditing, will significantly allow us to pay for our own initiatives, especially when we expand and get the growth trajectory that this, that these businesses will allow. That's that 27 states that we are going to grow into as quickly as possible. So I don't want to really get into forecasting yet until the numbers are done from the finance teams. But you know, I could tell you that both business have been sizable, not only in the past, but will continue on being sizable into the future. Our hope is to grow these two-billion-dollar business, you know, over these 27 states within the next year to a year and a half.
John Brown: Thank you. I really appreciate your answer. Thank you.
Joe Moscato: Thank you. Thank you very much for the question.
Quote:I thought he said between Dec 10th and 15th. That would mean this week, sometime, not necessarily today. It was towards the end of the CC as an answer to one of the questions.
Maybe I misheard?
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Disclaimer: Of course, all of this is my opinion and you should not make any investment decisions based on my opinion. I have not received any non-public information.
