Thank you for joining the Cumberland Pharmaceuticals Third Quarter 2020 Financial Report and Company Update. Please note that this conference call is being recorded at the company's request and will be archived on Cumberland's website for one week from today's date. Now I would like to introduce Erin Gull, who handles Corporate Relations at Cumberland. Erin, please go ahead.

Good afternoon, everyone. Earlier today, we issued a press release containing the company's financial results for the third quarter ended September 30, 2020. You can find a copy of that release on our website at www.cumberlandpharma.com. Please note that today's discussion may include forward-looking statements as defined in the Private Securities Reform Act of 1995. And because any such statements reflect the company's current views and expectations concerning future events, they may involve risks and uncertainties. Additionally, there are many factors that could affect the company's future results, including, but not limited to, natural disasters, public health epidemics, economic downturns and other events beyond our control. Those issues are described under the caption Risk Factors in our Form 10-K and any additional updates filed with the SEC. And also any forward-looking statements made during today's call are qualified by those risk factors. And despite our best efforts, actual results could differ materially from our expectations, and the information shared on the call today should be considered current as of today only. Please remember that the company does not assume any responsibility to update any forward-looking statements, whether as a result of new information or due to future developments. During the call today, we will be referring to several of our marketed brands and full prescribing and safety information for each brand can be found on the individual product website, and the links to those product sites can be found on our corporate site at cumberlandpharma.com. Also today, we'll provide some non-GAAP financial measures with respect to our performance, and explanation and reconciliation to GAAP measures can be found in our earnings release and its financial tables. With us on today's call are A.J. Kazimi, Cumberland's Chief Executive Officer; Martin Cearnal, our Chief Commercial Officer; and Michael Bonner, our Chief Financial Officer. We'll start today with an overview of our progress during the third quarter and will follow with a discussion of our commercial activities, and then we'll review our financial results and finish with the closing remarks before opening the call to any questions. I will now turn the call over to A.J. Kazimi, Cumberland's Chief Executive Officer, to begin our corporate update and discussion of the company's performance.

Good afternoon, everyone, and thank you for joining us. I'd like to start by saying, I hope you and your families are safe and well. As we move to the close of 2020, we certainly recognize it's been a particularly difficult year with the pandemic impacting all our daily lives. And our thoughts continue to go out to those who have suffered, especially those with life-threatening or health conditions as well as those who have lost their jobs or their businesses as a result of the pandemic. And I'd like to provide a special thanks to our team for their steadfast efforts during these difficult times. I'm pleased to report that our facilities continue to remain open, including our headquarter offices and our CET laboratories. While the pandemic has impacted hospital admissions and physician office visits, we are very fortunate that our business has remained steady. Our portfolio of FDA-approved brands delivered combined revenues of $9.3 million during the third quarter, a 33% increase over the prior year period. As we've previously stated, our performance should be evaluated on an annual basis, and we were also pleased to see an overall 8% increase in year-to-date revenues through September when compared to 2019. Furthermore, we delivered $4.5 million in cash flow from operating activities year-to-date, more than double the prior year period. Adjusted earnings for the third quarter were $0.2 million or $0.02 a share, also a significant increase over last year. Our balance sheet at the end of September included $96 million in total assets with over $26 million in cash. Total liabilities were approximately $48 million, resulting in $48 million of total shareholders' equity as well. During the quarter, our Vibativ product was used to help hospitalized COVID patients who go on to develop bacterial infections in their lungs.…

Thank you. As A.J. mentioned, the pandemic is affecting how many businesses are run in 2020, and we've taken measures to lessen its impact on Cumberland as much as possible. We're focused on protecting everyone's safety and well-being, while also continuing to supply and support our medicines for the patients who need them. Recall, we launched our next-generation Caldolor product at the beginning of 2020 with a new presentation in a pre-mixed bag. This ready-to-use product contains 800 milligrams of ibuprofen and a patented 200 milliliter formulation designed for injection. It offers hospitals and medical facilities, improved dosing accuracy and cost savings while managing pain and reducing opioid consumption. As a nonsteroidal anti-inflammatory drug, Caldolor may be used as the sole method of treatment for mild to moderate pain or as part of a multimodal treatment for severe pain. During the third quarter, we announced new data from a clinical study featuring Caldolor that was published in the Journal of Orthopedic Trauma. The study evaluated the efficacy of Caldolor in the management of acute pain and orthopedic trauma patients and monitor the use of opioids in those patients. The results of this level one trauma center study demonstrated that the use of Caldolor significantly reduced opioid consumption. Moreover, pain was more effectively controlled with Caldolor when compared to standard of care narcotics. Additionally, important results from a review of nine clinical studies evaluating Caldolor was also recently published. This comprehensive review was presented in the Journal of Clinical Therapeutics and involved over 1,000 adult patients with over 750 receiving Caldolor and another 300 receiving placebo or a comparator medication. The data compiled in this review noted that the use of Caldolor decreased surgical stress and improved post-surgery recovery. The study also determined that patients given Caldolor experienced less post-operative pain…

Thank you, Marty. I'd now like to ask our Chief Financial Officer, Michael Bonner, for the financial review. Michael?

Thank you, A,J. For the three months ended September 30, 2020, net revenues from continuing operations were $9.3 million, a 33% increase over $6.9 million during the prior year period. We also reported an additional $750,000 in the third quarter of this year as discontinued operations associated with return of rights to two products that we no longer distribute. Net revenues by product for the third quarter included $3.6 million for Krisatlos, $2.8 million from Vibativ, and $1.4 million from Caldolor. Total operating expenses for the quarter were $10.5 million compared to $10.1 million for the prior year period. The main driver of this change was the increase in cost of goods sold associated with the growth in sales of Vibativ. Recall that significant Vibativ inventory was transferred to Cumberland as part of the acquisition of the brand during 2018. As part of the acquisition accounting, the fair value of these units sold included a significant step-up of our actual manufacturing costs. The resulting adjusted earnings for the third quarter were $0.2 million or $0.02 per share, a significant turnaround from the loss of $1.7 million, a loss of $0.11 per share during the prior year period. Year-to-date cash flow from operating activities in the third quarter of 2020 was $4.5 million, more than double the $2.2 million for the same period during 2019. As a reminder, the financial terms for the Vibativ acquisition included a $20 million payment upon closing. This initial payment was funded by our revolving credit facility. We subsequently provided a $5 million milestone payment and are providing royalties based on product sales. We accounted for the Vibativ acquisition as a business combination. A total of $34.2 million in new assets were added as a result of the acquisition, including $21.5 million in inventory, $11.8 million…

Thank you, Michael. So overall, our third quarter was quite successful given all the challenges of operating a business in the wake of the pandemic. We were able to generate solid financial performance and also advance on important initiatives. During the quarter, we continue to implement procedures to monitor the productivity of our sales organization and also redirect their promotional efforts. Despite being faced with numerous challenges, we rapidly adjusted to the changing landscape as our team applied creative ways to support our brands and interact with our customers. We are especially pleased with our favorable quarterly financial performance. We posted both sequential and year-over-year revenue growth, which is no small feat we feel in the pandemic operating environment. That speaks to the durability of our product portfolio as well as the commitment of our commercial organization. The catalyst for our business moving forward remain the same, and they include contributions from the Vibativ acquisition, introduction of the new Caldolor formulation, the launching of the RediTrex product line as well as further development of the company's clinical programs. Our commercial brands, combined with new products from our pipeline, will be important growth contributors to our business for years to come. The addressable markets are quite large for a company of Cumberland's size. And if we're able to maximize the potential of these opportunities, we believe that can have a significant impact on our value. We'll continue to focus on these growth drivers while also managing our operations with financial discipline. We're working on multiple fronts to build the value of Cumberland. And we'll also continue our business development efforts as we seek the selective additions that complement our commercial portfolio. And I'd just like to close by noting that we're headquartered here in Nashville, Tennessee, which has the largest concentration…

[Operator Instructions]. Our first question will come from the line of James Terwilliger from Norland Capital. You may begin.

Congrats on the tone of the conference call, it seems very positive concerning your performance for the quarter, especially underneath the COVID cloud. I'm kind of new to the name. Can you tell me anything more about the RediTrex launch? You're going to do a limited or soft launch, which makes a lot of sense, and then when does that pick up momentum? And how should we think -- how should I think about that in 2021?

Okay. Marty?

Yes. As you noted, we're going to use a soft launch because this is a new medical specialty, and there is limited access to physicians' offices. So we want to build relationships during the next few months. We'll go with a full launch in the springtime. And at that point, kind of unleash all of the resources that we have built to effectively launch this product, but do it with the knowledge that we've gained during this soft launch period. So, we would expect modest sales through the balance of this year with gradually increasing sales as we move into 2021.

[Operator Instructions]. All right, I don't have any further questions at this time. I'd like to turn the call back over to management for any closing remarks.

Sure. We do understand that many of you prefer a private discussion with management. And if you'd like to do so, please just reach out to Erin Gull here, and she can help us a schedule such a call for you. We certainly appreciate your time and interest in Cumberland, and we do look forward to providing another update after the end of the third quarter.

Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.