ChromaDex Corporation Reports Second Quarter 2023 Financial Results
- Positive Q2 2023 results with 21% year-over-year revenue growth
- Gross margin percentage improved by 80 basis points to 60.8%
- Net cash inflow from operating activities was $6.1 million for the six months ended June 30, 2023
- None.
Strong quarter with total net sales of
Second Quarter 2023 and Recent Highlights
-
Total net sales were
, with$20.3 million from Tru Niagen®, up$16.9 million 21% and16% from the prior year quarter, respectively.
-
Strong gross margin of
60.8% and a reduction in operating expenses.$1.8 million
-
Sales and marketing expense as a percentage of net sales was
29.6% , an improvement of 1,830 basis points, compared to47.9% from the prior year quarter.
-
Net loss was
or$2.2 million per share, an improvement of$(0.03) , or$4.2 million per share, from the prior year quarter.$0.06
-
Adjusted EBITDA, a non-GAAP measure, was a positive
, a$0.2 million improvement from the prior year quarter.$4.9 million
- Two published abstracts, originally presented in April 2023, highlighted the significance of NAD+ in glaucoma patients and that supplementation with nicotinamide riboside, NR, shows promising effects.(1)
- ChromaDex External Research Program (CERP™) celebrated its 10th anniversary, signing more than 275 global research agreements with over 235 independent, expert investigators to uncover the full potential of NAD+ with Niagen®. This research has shown that the health benefits of Niagen® translate from preclinical models to human clinical studies for brain, heart and muscle health with remarkable consistency. Looking to the next 10 years, there is great anticipation for emerging benefits in sensory, infant, maternal and reproductive health to be translated from preclinical to human studies.
“This was another excellent quarter, delivering
(1) Refers to two independent clinical study abstracts originally presented in April 2023 at the Association for Research in Vision and Ophthalmology (ARVO) annual meeting and recently published in the peer-reviewed ARVO journal, Investigative Ophthalmology & Visual Science.
Results of operations for the three months ended June 30, 2023 compared to the prior year quarter
ChromaDex reported a net sales increase of
Gross margin percentage improved 80 basis points to
Operating expense decreased
Net loss was
Net cash inflow from operating activities was
2023 Full Year Outlook
Looking forward, for the full year, the Company expects at least
Investor Conference Call
A live webcast will be held Wednesday, August 9, 2023 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss ChromaDex’s second-quarter financial results and provide a general business update.
To listen to the webcast, or to view the earnings press release and its accompanying financial exhibits, please visit the Investors Relations section of ChromaDex’s website at http://chromadex.com. The toll-free dial-in information for this call is 1-888-330-2446 with Conference ID: 4126168.
The webcast will be recorded, and will be available for replay via the website from 7:30 p.m. Eastern time on August 9, 2023 through 11:59 p.m. Eastern time on August 16, 2023. The replay of the call can also be accessed by dialing 800-770-2030, using the Replay ID: 4126168.
Important Note on Forward Looking Statements:
This release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, and Section 21E of the Securities Exchange Act of 1934. Statements that are not a description of historical facts constitute forward-looking statements and may often, but not always, be identified by the use of such words as “expects,” “anticipates,” “intends” “estimates,” “plans,” “potential,” “possible,” “probable,” “believes” “seeks,” “may,” “will,” “should,” “could,” “predicts,” “projects,” “continue,” “would” or the negative of such terms or other similar expressions. Forward-looking statements include statements regarding our intentions, beliefs, projections, outlook, analyses or current expectations concerning, among other things: the quotation from ChromaDex’s Chief Executive Officer, and statements related to the Company’s 2023 financial outlook including but not limited to revenue growth, gross margin, expenses, and investment plans. Risks that contribute to the uncertain nature of the forward-looking statements include: inflationary conditions and adverse economic conditions; our history of operating losses and need to obtain additional financing; the growth and profitability of our product sales; our ability to maintain sales, marketing and distribution capabilities; changing consumer perceptions of our products; our reliance on a single or limited number of third-party suppliers; risks of conducting business in
About ChromaDex:
ChromaDex Corporation is a global bioscience company dedicated to healthy aging. The ChromaDex team, which includes world-renowned scientists, is pioneering research on nicotinamide adenine dinucleotide (NAD+), an essential coenzyme that is a key regulator of cellular metabolism and is found in every cell of the human body. NAD+ levels in humans have been shown to decline with age, among other factors, and may be increased through supplementation with NAD+ precursors. ChromaDex is the innovator behind the NAD+ precursor nicotinamide riboside (NR), commercialized as the flagship ingredient Niagen®. Nicotinamide riboside and other NAD+ precursors are protected by ChromaDex’s patent portfolio.
The Company delivers Niagen® as the sole active ingredient in its consumer product Tru Niagen® available at www.truniagen.com and through partnerships with global retailers and distributors. The Company also develops and commercializes proprietary-based ingredient technologies and supplies these ingredients as raw materials to the manufacturers of consumer products. The Company further offers natural product fine chemicals, known as phytochemicals, and related research and development services. Follow us on Twitter @ChromaDex and Instagram @TruNiagen and subscribe to our latest news via our website accessible at www.chromadex.com to which ChromaDex regularly posts copies of its press releases as well as additional updates and financial information about the Company.
ChromaDex Corporation and Subsidiaries Unaudited Condensed Consolidated Statements of Operations |
|||||||||||||||
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
||||||||||||
|
|
2023 |
|
|
|
2022 |
|
|
|
2023 |
|
|
|
2022 |
|
(In thousands, except per share data) |
|
|
|
|
|
|
|
||||||||
Sales, net |
$ |
20,323 |
|
|
$ |
16,732 |
|
|
$ |
42,879 |
|
|
$ |
33,991 |
|
Cost of sales |
|
7,967 |
|
|
|
6,690 |
|
|
|
17,005 |
|
|
|
13,417 |
|
Gross profit |
|
12,356 |
|
|
|
10,042 |
|
|
|
25,874 |
|
|
|
20,574 |
|
Operating expenses: |
|
|
|
|
|
|
|
||||||||
Sales and marketing |
|
6,009 |
|
|
|
8,021 |
|
|
|
13,883 |
|
|
|
16,258 |
|
Research and development |
|
1,365 |
|
|
|
1,245 |
|
|
|
2,558 |
|
|
|
2,323 |
|
General and administrative |
|
7,298 |
|
|
|
7,163 |
|
|
|
13,717 |
|
|
|
16,112 |
|
Total operating expenses |
|
14,672 |
|
|
|
16,429 |
|
|
|
30,158 |
|
|
|
34,693 |
|
Operating loss |
|
(2,316 |
) |
|
|
(6,387 |
) |
|
|
(4,284 |
) |
|
|
(14,119 |
) |
|
|
|
|
|
|
|
|
||||||||
Nonoperating income (expenses): |
|
|
|
|
|
|
|
||||||||
Interest income (expense), net |
|
125 |
|
|
|
(10 |
) |
|
|
191 |
|
|
|
(18 |
) |
Net loss |
$ |
(2,191 |
) |
|
$ |
(6,397 |
) |
|
$ |
(4,093 |
) |
|
$ |
(14,137 |
) |
|
|
|
|
|
|
|
|
||||||||
Basic and diluted loss per share attributable to common stockholders: |
$ |
(0.03 |
) |
|
$ |
(0.09 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.21 |
) |
Basic and diluted weighted average common shares outstanding |
|
74,967 |
|
|
|
68,336 |
|
|
|
74,882 |
|
|
|
68,325 |
|
ChromaDex Corporation and Subsidiaries Unaudited Condensed Consolidated Balance Sheets |
|||||
(In thousands except par values, unless otherwise indicated) |
June 30, 2023 |
|
December 31, 2022 |
||
Assets |
|
|
|
||
Current assets: |
|
|
|
||
Cash and cash equivalents, including restricted cash of |
$ |
26,406 |
|
$ |
20,441 |
Trade receivables, net of allowances of |
|
6,118 |
|
|
8,482 |
Inventories |
|
11,973 |
|
|
14,677 |
Prepaid expenses and other assets |
|
1,885 |
|
|
2,967 |
Total current assets |
|
46,382 |
|
|
46,567 |
|
|
|
|
||
Leasehold improvements and equipment, net |
|
2,501 |
|
|
2,799 |
Intangible assets, net |
|
591 |
|
|
671 |
Right-of-use assets |
|
3,179 |
|
|
3,523 |
Other long-term assets |
|
518 |
|
|
497 |
Total assets |
$ |
53,171 |
|
$ |
54,057 |
|
|
|
|
||
Liabilities and Stockholders' Equity |
|
|
|
||
Current liabilities: |
|
|
|
||
Accounts payable |
$ |
10,031 |
|
$ |
9,679 |
Accrued expenses |
|
8,079 |
|
|
7,337 |
Current maturities of operating lease obligations |
|
775 |
|
|
680 |
Current maturities of finance lease obligations |
|
10 |
|
|
16 |
Customer deposits |
|
166 |
|
|
157 |
Total current liabilities |
|
19,061 |
|
|
17,869 |
Deferred revenue |
|
3,806 |
|
|
3,955 |
Operating lease obligations, less current maturities |
|
3,137 |
|
|
3,539 |
Finance lease obligations, less current maturities |
|
17 |
|
|
22 |
Total stockholders’ equity |
|
27,150 |
|
|
28,672 |
Total liabilities and stockholders’ equity |
$ |
53,171 |
|
$ |
54,057 |
ChromaDex Corporation and Subsidiaries Unaudited Condensed Consolidated Statements of Cash Flows |
|||||||
|
Six Months Ended June 30, |
||||||
(In thousands) |
|
2023 |
|
|
|
2022 |
|
Net cash provided by / (used in): |
|
|
|
||||
Operating activities |
$ |
6,072 |
|
|
$ |
(11,030 |
) |
Investing activities |
|
(96 |
) |
|
|
(110 |
) |
Financing activities |
|
(11 |
) |
|
|
(7 |
) |
Net increase (decrease) in cash and cash equivalents |
|
5,965 |
|
|
|
(11,147 |
) |
Cash and cash equivalents beginning of period |
|
20,441 |
|
|
|
28,219 |
|
Cash and cash equivalents at end of period |
$ |
26,406 |
|
|
$ |
17,072 |
|
ChromaDex Corporation and Subsidiaries Unaudited Reconciliation of Non-GAAP Financial Measures |
|||||||||||||||||||
Reconciliation of Net Loss to Adjusted EBITDA |
|||||||||||||||||||
(In thousands) |
Q2 2023 |
|
Q1 2023 |
|
Q4 2022 |
|
Q3 2022 |
|
Q2 2022 |
||||||||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Net loss, as reported |
$ |
(2,191 |
) |
|
$ |
(1,902 |
) |
|
$ |
(1,418 |
) |
|
$ |
(985 |
) |
|
$ |
(6,397 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
|
||||||||||
Interest (income) expense, net |
|
(125 |
) |
|
|
(66 |
) |
|
|
(26 |
) |
|
|
5 |
|
|
|
10 |
|
Depreciation |
|
232 |
|
|
|
228 |
|
|
|
221 |
|
|
|
235 |
|
|
|
212 |
|
Amortization of intangibles |
|
39 |
|
|
|
41 |
|
|
|
43 |
|
|
|
44 |
|
|
|
50 |
|
Amortization of right of use assets |
|
173 |
|
|
|
171 |
|
|
|
191 |
|
|
|
170 |
|
|
|
169 |
|
Share-based compensation |
|
1,324 |
|
|
|
1,273 |
|
|
|
1,326 |
|
|
|
1,229 |
|
|
|
1,296 |
|
Severance and restructuring |
|
766 |
|
|
|
186 |
|
|
|
13 |
|
|
|
181 |
|
|
|
17 |
|
Other income - Employee Retention Tax Credit |
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
(2,085 |
) |
|
|
— |
|
Adjusted EBITDA |
$ |
218 |
|
|
$ |
(69 |
) |
|
$ |
350 |
|
|
$ |
(1,206 |
) |
|
$ |
(4,643 |
) |
Non-GAAP Financial Information:
To supplement ChromaDex’s unaudited financial data presented in accordance with generally accepted accounting principles (GAAP), the Company has presented Adjusted EBITDA, a non-GAAP financial measure. ChromaDex believes the presentation of such non-GAAP financial measure provides important supplemental information to management and investors and enhances the overall understanding of the Company’s historical and current financial operating performance. The Company believes disclosure of the non-GAAP financial measure has substance because the excluded expenses are infrequent in nature, are variable in nature or do not represent current cash expenditures. Further, such non-GAAP financial measure is among the indicators the Company uses as a basis for evaluating the Company’s financial performance as well as for planning and forecasting purposes. Accordingly, disclosure of this non-GAAP financial measure provides investors with the same information that management uses to understand the Company’s economic performance year-over-year.
Adjusted EBITDA is defined as net income before (a) interest, (b) depreciation, (c) amortization, (d) non-cash share-based compensation costs, (e) severance and restructuring expense and (f) Other income from the Employee Retention Tax Credit. While ChromaDex believes that this non-GAAP financial measure provides useful supplemental information to investors, there are limitations associated with the use of such measure. This measure is not prepared in accordance with GAAP and may not be directly comparable to similarly titled measures of other companies due to potential differences in the method of calculation. Management compensates for these limitations by relying primarily on the Company’s GAAP results and by using Adjusted EBITDA only supplementally and by reviewing the reconciliation of the non-GAAP financial measure to its most comparable GAAP financial measure.
Non-GAAP financial measures are not in accordance with, or an alternative for, generally accepted accounting principles in
View source version on businesswire.com: https://www.businesswire.com/news/home/20230809526989/en/
Investor Relations
+1 (949) 356-1620
InvestorRelations@ChromaDex.com
Media Relations
Kendall Knysch
Director of Media Relations
+1 (310) 388-6706 Ext. 689
Kendall.Knysch@ChromaDex.com
Source: ChromaDex Corporation
FAQ
What were ChromaDex's Q2 2023 financial results?
What was the revenue growth for ChromaDex in Q2 2023?
What is ChromaDex's 2023 revenue outlook?