Mohawk Group Holdings Inc (NASDAQ:MWK) Q3 2019 Earnings Conference Call - Final Transcript

Nov 05, 2019 • 05:00 pm ET

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Mohawk Group Holdings Inc (NASDAQ:MWK) Q3 2019 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good afternoon, ladies and gentleman. And welcome to the Mohawk Group Holdings Q3 Earnings Report Conference Call. [Operator Instructions] Later, we will conduct a question-and-answer session and instructions will follow at that time. [Operator Instructions].

I would now like to turn the conference over to your host, Mr. Ilya Grozovsky. Please go ahead.

Executive
Ilya Grozovsky

Thank you for joining us today to discuss Mohawk's third quarter 2019 earning results. On today's call are Yaniv Sarig, Co-Founder and CEO; and Fabrice Hamaide, Chief Financial Officer. A copy of today's press release is available on the Investor Relations section of Mohawk's website at mohawkgp.com.

I would like to remind you that certain statements we will make in this presentation are forward-looking statements and these forward-looking statements reflect Mohawk's judgment and analysis only as of today and actual results may differ materially from current expectations based on a number of factors affecting Mohawk's business.

Accordingly, you should not place undue reliance on these forward-looking statements. For a more thorough discussion of the risks and uncertainties associated with the forward-looking statements to be made in this conference call and webcast, we refer you to the disclaimer regarding forward-looking statements that is included in our third quarter 2019 earnings release as well as our filings with the SEC. We do not undertake any obligation to update or alter any forward-looking statements whether as a result of new information, future events or otherwise. In addition, the company may refer to certain non-GAAP metrics on this call. Explanation of these metrics can be found in the earnings release filed earlier today.

With that, I will turn the call over to Yaniv.

Executive
Yaniv Sarig

Thanks, Ilya. And thanks everyone for joining us today. I will begin today's call by reviewing the highlights of our third quarter results followed by further explanation of Mohawk's differentiated business model, and then I will briefly discuss our long-term growth opportunity. Fabrice will then review our financial results and a few items related to our outlook in more detail. We once again grew at a rapid pace as third quarter revenue increased approximately 65% to $40.6 million from $24.7 million a year ago.

Strong growth of our existing product portfolio in our direct channel combined with contributions from our successful product launches in the second half of 2018 and in 2019 fueled our topline performance. At the same time, adjusted EBITDA improved to a loss of $2.7 million from a loss of $4.5 million in the third quarter of 2018 driven primarily by significant fixed cost leverage and more efficient product fulfillment.

During the third quarter, we launched three new products including our portable washing machine and laundry dryer. We remain on track to launch 20 new products in the back half of the year for a total of 31 in 2019 compared to 11 in 2018. Fabrice will go into more detail about the timing and financial impact of our Q4 product launches in a moment. At Mohawk, we are building the CPG company of the future