NextPlat Corp (NXPL) 2026 Q2 法說會逐字稿

(Operator Instructions)

Welcome to the NextPlat Corp second quarter 2026 earnings call. Joining us on the call today are David Phipps, Chief Executive Officer. Amanda Ferrio, Chief Financial Officer. Birute Norkute, Vice President of Healthcare Operations.

I'll now turn the call over to David Phipps for his opening remarks.

Good morning and welcome to NextPlat second quarter 2026 resorts conference call. Thank you for joining us. On today's call, we will discuss our significantly improved second quarter results and highlight the many positive developments occurring in the business.

In addition to discussing the results of the quarter, we will also elaborate on key elements of our business strategy and focus areas so you can gain a better understanding of where we're heading and our current expectations regarding our future growth and profitability.

As is customary, I will begin today's call by briefly recapping the results of the second quarter.

Then turn the call over to Birute Norkute, our Vice President of Healthcare operations to discuss that segment in more detail and then send the call over to Amanda Ferrio, our Chief Financial Officer, to review our financial results. Following that, I will make closing remarks and then conclude the conference call by responding to questions that were submitted by our shareholders.

Our second quarter results provide clear evidence that the turnaround initiated over the past year is delivering meaningful results. Strong sequential growth in our e-commerce and contracted healthcare services, particularly 340B help drive our consolidated gross margin to a record level of approximately 40%.

While our net loss was virtually eliminated. We're extremely encouraged by this momentum and believe the positive trends across our markets position us to accelerate growth.

Achieve sustainable profitability and create significant long-term shareholder value. Importantly, our progress extends well beyond cost reductions. We are successfully unlocking the value of our operations, particularly by using our community pharmacies as local hubs. The higher margin, 340B. Long-term care and institutional healthcare services.

Our planned acquisition near Pensacola will further advance its strategy, strength, strengthening a differentiated business model that sets us apart from traditional national pharmacy chains and creates exciting opportunities for continued expansion.

At this point, I'd like to now review our business and provide some additional insights which I believe will be helpful for investors in measuring our progress. In our healthcare segment we're pleased to report the following improvements in operations during the second quarter.

As a result of our concerted efforts to invest in our higher margin contracted healthcare service businesses during the second quarter, we continue to see accelerating growth in prescription volumes from a higher margin 340B and healthcare costs.

Contracted pharmacy revenue increased 136% to approximately $2.2 million. Driven by medication fulfillment contracts secured in late 2025 and early 2026. On a sequential basis, contracted pharmacy revenue increased approximately 20% from the first quarter of 2026, supported by ongoing business development activity and the addition of multiple new contracted clients.

As has been the trend since last year. Year over year, total pharmacy prescription revenue was down as anticipated. Primarily reflecting lower pay and reimbursement rates and pay a mix, something Amanda will commence on shortly.

The strong growth in contracted pharmacy revenue is offsetting these expected headwinds. As we noted in our CA CEO update announcement and earnings press release.

Momentum in this segment is building as we set another record, adding six new 340B contracts in Q2, beating the first quarter record of five new contracts. We expect continued growth throughout the remainder of the year as revenue from the 5 new covered entities secured in the 1st quarter and new entity is secured in Q2 begin contributing to our results later in the current quarter and more fully in the.

Fourth quarter. In terms of the retail pharmacy business, as I noted earlier. While there continue to be challenges here, we believe our diversified business model built around well-managed community pharmacies. Combined with the addition of our contracted services offerings will allow us to profitably grow the business.

As such, growing contracted services revenue as well as the additional pharmacy revenue from our acquisition are expected to contribute to meaningful, sequential and year over year topline healthcare revenue growth, starting in the third quarter and early fourth quarter. And finally, as we indicated last quarter, we're actively expanding the scale and scope of our business through two key pathways.

First, we are preparing for the launch of a new online e-commerce healthcare website. Which will feature an array of popular prescription medications such as GLP1s and over the counter products, including our Florida sunshine brand of premium vitamins and supplements. This new healthcare e-commerce website will allow us to leverage our relationships with the current and potential customers.

As part of our go to market plans. The new site is expected to go live this quarter. And second, we are actively working on additional growth initiatives at a [FAmco ] subsidiary, which we believe will quickly add more scale to its operations. Both through potential acquisitions as well as relocating, well, not currently for our existing pharmacies.

We expect to announce developments on these efforts shortly. In our e-commerce segment, here are the most recent highlights.

The global demand for satellite-based connectivity products continues to be strong, and during Q2 we generated sales and customers in 115 countries and produce record levels of high margin recurring airtime contract revenue.

Looking at the demand we're seeing, there is particular strength in the government and military sector in Europe where we're receiving increasing orders for satellite enabled internet thing products offered by partners such as Iridium and Global Star, as well as Iridium Push to Talk devices under contract with the UK government department.

Over $1.75 million in sales to government sector customers in the first half of 2026 continues to support sequential growth in this segment. At this point I would now like to turn the call over to Birute for her update.

Thank you, David.

In our healthcare business, second quarter results reflect the operational improvements and business development investments made over the past several quarters and a deliberate shift in the composition of our volume toward higher value contracted services.

We filled approximately 96,000 prescriptions during the quarter compared with approximately 91,000 in a prior year period. Within the total, 340b prescriptions grew to approximately 7,500 an increase of more than 33% year over the year.

Retail prescription revenue declined year over year. This was anticipated and primarily reflects lower payer reimbursement rates and payer mix. Pressures affected retail pharmacy broadly across the industry, both in our contracted and 340B businesses helped offset these headwinds.

Turning to profitability. The healthcare gross margin was about approximately 46% in the second quarter compared with 39% in the first quarter of 2026 and 20% in the second quarter of 2025.

Healthcare gross profit increase to approximately $3.6 million from approximately $1.8 million in a prior year period reflecting greater profitability on a lower revenue base.

Contracted entry 340B services represent approximately 61% of total healthcare gross profit compared with approximately 52% a year ago. Our expanded sales, account management, and business development teams continue to generate traction, particularly within our 340B vertical.

We secured six new contractors covered entities during the second quarter following in the fourth quarter, each a quarterly record. These agreements typically require approximately 90 days to on board before entities begin referring prescriptions for fulfillment.

We expect revenue from the five entities secured in the fourth quarter to begin contributing late to the current quarter. With the second quarter cohort contributing more fully to the fourth quarter. On our footprint. Subsequent to the quarter end, we announced an agreement to acquire a profitable pharmacy operation in Pensacola area of the northwest Florida, a market we do not currently serve.

The transaction is expected to close by the fourth quarter subject to customary closing conditions and will be funded from cash on hand. Beyond extending our geographic reach, this acquisition provides a licensed physical platform through which we can introduce the higher values.

Services we have built 340B support, contracted medication fulfillment and provide the relationships. That is the model we intend to apply as we evaluate additional markets and adjacent service lines.

One note on the margin profile. Our contracted business remains concentrated among a limited number of entities and mixed in any given quarter can move margin in either direction. We are focused on broadening that base as new covered entities on board. Our operating priorities for the second half are straightforward.

On boarding the 11 covered entities secured year-to-date to full referral volume, closing and integrating the [ptool] operation.

And continuing to optimize us for the footprint. We're pleased with the more efficient and scalable healthcare platform we have built, and we remain focused on growing this business deliberately, delivering value to our customers, our patients, and the communities we serve.

That concludes my remarks. Back to you, David.

Thank you, Birute.

At this point, I will turn the call over to Amanda to discuss her financial results for the quarter ended June 30th, 2026.

Thank you, David. Good morning, everyone.

The second quarter of 2026 reflects the impact of the turnaround work we began last year and continues the positive sequential trends we established late in 2025. These initiatives implemented throughout 2025 are now translating into measurable improvements in margins, operating efficiency, and overall financial performance.

Unless I note otherwise, the figures I'll discuss are rounded. Precise amounts are in the press release and the soon to be filed Form 10-Q. For the second quarter of 2026, total net revenues were $11.9 million compared to $13.2 million in the prior year period and $9.9 million in the first quarter of 2026, a sequential improvement of more than 20%.

Year over year revenue comparisons continue to reflect the operational restructuring and the evolving reimbursement dynamics within our healthcare business. As we have said previously, we believe the more important trend is a sequential improvement in revenue, margins, and operating leverage.

Looking to the third and fourth quarters, we believe that in addition to continued sequential improvement, year over year comparisons should become more favorable. Within healthcare operations, second quarter net revenues were $7.8 million compared to $9.1 million in the second quarter of 2025. The composition of that revenue continued to shift towards higher value, more sustainable streams, specifically, 340B contract services and medication fulfillment services.

Pharmacy contract revenue increased to $2.2 million compared with $0.9 million in the prior year period, an increase of 136%. Roughly $0.7 million of that increase came from 340B Contract Services primarily expanded volume under existing covered entity relationships, and $0.6 million came from the medication fulfillment contracts we secured late in 2025. On a sequential basis, pharmacy contract revenue increased 20% for the first quarter. Pharmacy prescription revenues net was $5.6 million compared with $8.2 million in the prior year period.

That year of year decrease reflects $1.6 million of lower reimbursement rates and $1 million of lower prescription volume consistent with the changes in payer reimbursement and payer megs we have discussed.

The more important point is what is happening underneath. Sequentially, prescription revenue increased 16% from the first quarter and gross margin on that business improved to 25% from 11% a year ago.

That improvement reflects higher gross profit per prescription, a shift in dispensing mix, continued margin discipline and the effect of the Medicare maximum fair prices program that took effect in January.

Turning to e-commerce operations, this segment continued to be a steady performer and an important contributor to the business, Revenue was $4.1 million essentially with the prior year period and up 27% sequentially from $3.2 million in the first quarter.

Gross margin in this segment was 27% compared with 26% a year ago. Demand remains solid across satellite-based connectivity and IoT products, and we continue to believe the segment is well positioned to provide consistent cash flow generation and long-term growth opportunities.

Consolidated the gross profit for the quarter was $4.7 million, an increase of 63% compared to $2.9 million in the prior year period and $3.4 million in the first quarter.

Consolidated gross margin improved to 40% compared to what's 22% in the second quarter of 2025, an expansion of roughly 18% points and up from 35% in the first quarter of 2026. Within healthcare operations, gross margin was 46% compared to 20% a year ago.

This is the strongest quarterly gross margin performance in the company's history and reflects the direct benefit of our strategy to improve revenue quality and overall operating efficiency.

Total operating expenses were $4.8 million compared with $4.7 million in the second quarter of 2025, an increase of about 2%. That modest increase is entirely attributable to professional fees included within selling general and administrative expenses, which rose approximately $0.5 million year over year.

Every other operating expense line declined or remained flat. Excluding the increase in professional fees, our operating expense base declined year over year, and we would expect the elevated professional fee level to moderate as the year progresses.

The combined improvement in gross profit and operating discipline brought us to near breakeven. Operating loss for the second quarter was $127,000 compared with $1.8 million in the prior year period, a reduction of 93%. And compared with an operating loss of $1.1 million in the first quarter of 2026. Net loss attributable to common stockholders was $144,000 or $0.05 per share compared with a net loss of $1.8 million or $0.69 per share in the second quarter of 2025.

From a segment perspective, both operating segments were profitable in the quarter.

Healthcare operations generated segment operating income of $1 million compared with a segment operating loss of $1.1 million in the prior year period and a segment operating income of $24,000 in the first quarter of 2026. E-commerce operations generated a segment operating income of $200,000 compared with $88,000 in the prior year period and a segment operating loss of $84,000 in the first quarter.

We ended the quarter with $11.9 million in cash, an increase of 0.9 million for March 31st and working capital of $14.2 million. For the first six months of the year, cash used in operating activities was $1.5 million compared with $3.1 million in the same period last year. We continue to maintain a healthy liquidity position and a conservative balance sheet with no meaningful debt. In July, we announced an agreement to acquire a community pharmacy near Pensacola, Florida for $1.5 million in cash.

That transaction is targeted to close by the end of the third quarter and remain subject to customary closing conditions, including completion of due diligence and negotiation of a lease for the premises.

Assuming it closes on that timeline, we would expect our third quarter cash balance to reflect that outflow.

I'd also note that we have not sold any shares under the at the market program we established in May.

It remains available to provide financial flexibility to support growth initiatives including potential joint ventures or acquisitions, but we have no specific plans for its use at this time.

Looking ahead, our priorities for the remainder of 2026 remain centered on. Continuing to expand contract-based healthcare and fulfillment services. Sustaining gross margins and improving operating leverage. Maintaining disciplined expense management, including corporate overhead.

Supporting growth organically through recurring and contract-based revenue streams while also evaluating strategic opportunities such as possible joint ventures or acquisitions. Improving cash flow performance and positioning the company for sustained profitability.

Based on improved fundamentals in the business and the anticipated contribution from new contracted services and healthcare operations.

We believe the sequential financial improvements we are seeing are sustainable. If current trends continue, we expect to reach bottom line profitability beginning in the third quarter and to sustain it into 2027. I would know two things about that expectation.

The third quarter will absorb transaction and integration costs related to the pharmacy acquisition, and this is a forward-looking statement subject to the risk and uncertainties described in our filings. I encourage you to review our financial statements and disclosures in our quarterly report on Form 10-Q for additional detail.

That concludes my remarks. Back to you, David.

Thank you, Amanda.

Before we turn to investor questions, I would like to make some closing remarks and provide some insights into what we see over the remainder of 2026 and beyond.

As I indicated earlier, as a team we are pleased with the improvements made by the company over the past year. The progress we have made has clearly created a robust platform for steady sequential growth and profitability.

Furthermore, supported by a strong financial foundation. We now have the increased ability to focus our attention on the future. Investing in key areas that will support growth and profitability. In healthcare, we will continue to capitalize on the many opportunities we see for growth. Both organically and through accretive acquisitions by combining retail, specialty, institutional, 340B and government services through a single pharmacy operation, we can support multiple patient populations and healthcare partners.

This diversified model reduces reliance on any one customer channel and creates several avenues for sustainable long-term growth, providing us with the ability to expand our footprint at a time when the mass retail chains are increasingly facing significant challenges.

In e-commerce, through initiatives such as our new online healthcare marketplace and supported by continued strong global demand for satellite-based connectivity products. We are creating an expanded platform capable of delivering products to millions of consumers, no matter where they are. Investors, we remain committed to delivering on the value we see in the business.

But that turnaround largely complete. We are positioned to drive top and bottom-line results, which we believe will create sustainable shareholder value over the short and long-term. There is always more work to be done, but as successful turnaround efforts provide us with increased confidence that we are achieving our goals and creating sustainable value for all of our stakeholders.

We wish to thank our shareholders for their continued support.

At this point we can now conduct the Q&A portion of today's call. We have again asked investors and shareholders to submit their questions in advance. And we would like to thank all of you who did.

Question number One.

Can you comment on additional acquisitions in the pharmacy space? Are you looking beyond Florida? How would you fund future acquisitions, would you have to dilute current shareholders?

At this point in time, we see many advantages to concentrating our brick-and-mortar focus on Florida. Due to attractive population demographics and our well-established infrastructure.

We are actively exploring additional acquisitions in Florida looking for transactions which meet our specific requirements, namely in markets not saturated by the larger chains, established locations with solid cost to finance specifically profitable operations.

To be clear, we are approaching future action positions in a very conservative and prudent manner, specifically as it relates to their ability to add accretive to our business.

Their margins, cash flow, and profitability. Because of our improved operating results, we have significant flexibility on how we could fund a transaction.

We could consider using a combination of restricted shares, earnouts, cash, or even bank lines of credit, which would allow us to capture value without simply doubting our shareholders.

Question number Two.

Will AI play a role in the company's operations? If so, how will it affect the company's business?

AI is becoming increasingly important to our growth strategy and operating capabilities.

It enables us to identify and respond to trends across our e-commerce and healthcare businesses more quickly.

While also helping us efficiently process and analyze the growing volumes of patient data generated as our healthcare operations expand. AI is also a core component of Clear metrics four, our proprietary healthcare data analytics and reporting platform which was recently deployed internally and with customers.

On the e-commerce side, we have developed several new systems internally which automate tasks and improve efficiency using AI.

Question number Three.

Does the company have any update on the status of the ongoing lawsuit?

As of today, there is no update beyond what we have already disclosed in our previously filed periodic reports. Our Form-10 for the second quarter will be filed shortly and contain a current disclosure on this matter.

So, I'd refer you to that and to our prior filings. This remained in the hands of council and our insurance company. We remain committed to resolving it as quickly as possible while protecting the long-term interests of our shareholders. That was the final question that we received from investors.

Thank you all again for submitting them.

Please remember that you can submit your questions on our investor relations email, which is investors at Nextplat.com or with our IR contact listed on our press releases, Michael Glickman, at Mike at MWGC.net.

That concludes our earnings conference call. We look forward to continuing to share with you our progress in the weeks and months ahead.

Have a nice rest of your day.

(Operator Instructions)

Ladies and gentlemen, thank you for your participation. This does conclude today's teleconference.

You may disconnect your lines and have a wonderful day.