NovaBay Pharmaceuticals, Inc. (AMEX:NBY) Q4 2022 Earnings Call Transcript

Jeffrey Cohen: Okay. Got it. And then lastly, as far as our Genex and some of the other companies out there and products out there, what have you been doing on the M&A front? And how is your appetite there? And is it specific to ocular and eye care, or it also may spill over into our skincare and beauty?

Justin Hall: Yes. So, I €“ Jeff, the only thing that I can really say right now is that we are absolutely committed to doing something in the M&A field this year before the end of the year. And I will just say, well, I will be disappointed if we don’t do something. So, I will just kind of leave it at that, because we are going to have to be very opportunistic and make sure that the deal is the right thing for the company at the right time, and at the right price. But with all of that said, I do think that our eye care vertical, and the avenue of a franchise is sort of a more fertile ground for something like that, because as I mentioned, we do have a lot of relationships with eye care professionals. And if we can leverage those relationships by simply just dropping another product in the bag, that’s going to bring the most, I think synergies to us. But we have to make sure that whatever comes our way is, makes sense at the time.

Jeffrey Cohen: Okay. Perfect. Got it. That does it for us. Thanks for taking the questions.

Justin Hall: Yes. Always. Thank you.

Operator: Our next question comes from Sentient Capital Markets. Please go ahead.

Unidentified Analyst: Hi. It’s Rafai for Edward Wu with Sentient Capital Markets. Can you talk a little bit about international growth opportunities for each of the products?

Justin Hall: Yes, sure. So, the sort of growth that I think we will see in our wound care vertical, this year will come mostly from China. And then for DERMAdoctor, we have always looked at both China and the EU as tremendous growth opportunities. So, DERMAdoctor has created global formulations that can be sold all over the world. So, lining up distributors and supporting growth in those foreign markets is definitely an opportunity that we are looking to develop this year.

Unidentified Analyst: Great. Are you looking at any other further product line extensions for either Avenova or DERMAdoctor?

Justin Hall: Yes. So, we have really shifted strategy this year from last year. So, we started last year, in €˜22, with interest rates low and the stock market doing well and the capital markets very accessible. And now just sort of a short 12 months later, the world is a very different place. And so we launched seven products last year. And I think our general strategy for this year is going to be to sell more of what we have. So, we are not going to be investing heavily in new product development and new product launches, what you will see is us selling more of what we have in sort of new and better ways. We do have one or two things lined up for the rest of the year. But those things were set into motion, well before the beginning of this year, so it is a shift in strategy, but it is, we won’t be totally without new product launches this year.

Unidentified Analyst: Great. One more question. Are you expecting €“ what is your outlook for digital spending compared to more traditional as the marketing expense?

Justin Hall: Yes. So, we really did a huge shift last year. And what we did was we tried to find the floor with our digital marketing spend. And by that, I mean the least amount of money we can spend and still maintain sales, and I think we were able to find that floor and achieve it with both brands. And so this year, I think we are going to continue sort of at the same levels without any large increase in that sales and marketing expense. So, that will remain relatively steady, but not to harp on this too much. But our strategy for this year is really to leverage our relationships with eye care professionals and strengthen that doctor. Number one, doctor recommended positioning for Avenova. And then also just optimize all the digital ad spend for all of our products, especially those that are on Amazon.