Teligent, Inc. (NASDAQ:TLGT) Q3 2019 Earnings Conference Call - Final Transcript
Nov 04, 2019 • 04:30 pm ET
Teligent and that we will be ready to launch product on or near our approval date.
Let me now turn the call over to Damian to review the financial performance of the quarter. Damian?
Thank you, Jason, and good afternoon, everyone. Today, I will highlight the key takeaways from our third quarter financial performance and last week, we issued several press releases and SEC filings. In order for you to have a clearer understanding, I would also like to provide some context relating to those communications.
Let me start with highlights of Teligent's 2019 third quarter financial performance. In the third quarter, we posted $18.5 million of revenue, a 39.4% gross margin and generated $2.1 million or 11.3% of positive adjusted EBITDA. This is our second consecutive quarter of revenues exceeding $18 million and an adjusted EBITDA margin of more than 11%. It's also our third consecutive quarter of declining operating expenses and our year-to-date gross margin exceeds 43%. These are just a few trends that further evidence our focus on forging the path to profitability that began just over a year ago with a conscious effort to address gaps in our supply chain, improve the quality of demand for our products and reduce discretionary spending.
Third quarter revenue included strong sales of U.S. topical products and Canadian injectable products. U.S. topical sales for the quarter were $13.3 million, and Canadian injectable sales were $5.1 million, with the remaining $0.1 million of third quarter sales derived from contract manufacturing.
On a year-to-date basis, our selling, general and administrative expenses are down 1.4% in comparison to the same period in 2018. However, as mentioned on previous calls, we've incurred more than anticipated legal fees in connection with primarily two disputes, both of which are disclosed and explained in previous SEC filings.
If we exclude legal fees from this comparison, we have reduced year-on-year SG&A by 10%. That's a 10% reduction despite a 25% year-on-year growth in our global employee base, the majority of which related specifically to the expansion of both our quality and sales teams.
In respect to the Company's cash position, we ended the quarter with $6.7 million of available cash compared to $4.1 million at June 30th. Excluding cash movements related to financing, cash flow was essentially breakeven for the quarter.
In respect to Teligent's EBITDA performance, the Company realized $4 million of year-to-date adjusted EBITDA equal to an 8% adjusted EBITDA margin. And for the 12-month period ending September 30th, 2019, consolidated adjusted EBITDA, which is used for financial covenant compliance purposes and defined in the Ares oan agreement, the Company realized $4.8 million, therefore passing the $3 million September 30th trailing 12-month financial covenant. Given this performance, $414,000 of adjusted EBITDA is needed in the fourth quarter to pass the year-end trailing 12-month consolidated adjusted EBITDA financial covenant of $5 million.
Overall, our financial performance continues to reflect the positive impact of our prior year and ongoing actions to expand our customer base, price our products