Harrow Announces Second Quarter 2023 Financial Results
- Record revenues and adjusted EBITDA indicate strong financial performance
- Completed public offering and expanded loan may improve financial position
- Acquisition of commercial rights to drugs expands product portfolio
- None.
Second Quarter 2023 and Recent Selected Highlights:
-
Record revenues of
, an increase of$33.5 million 44% over in the prior-year quarter and an increase of$23.3 million 28% over in the sequential quarter.$26.1 million -
GAAP net loss of
( .$4.2) million -
Record adjusted EBITDA of
, an increase of$11.0 million 144% over in the prior‑year quarter and an increase of$4.5 million 108% over in the sequential quarter.$5.3 million -
Completed public offering of common stock for aggregate gross proceeds of
.$69 million -
Expanded Oaktree Loan from
to$100 million .$112.50 million - Acquired certain commercial rights to FLAREX®, NATACYN®, TOBRADEX® ST, VERKAZIA®, ZERVIATE®, and Non-Prescription Brands FRESHKOTE® and Cationorm® PLUS.
- Acquired North American commercial rights to VEVYE®, a novel FDA-approved drug labeled to treat both the signs and symptoms of dry eye disease.
- Completed transfer of New Drug Application for VIGAMOX®.
“Our team has made great progress positioning Harrow as a top-tier
Second quarter 2023 figures of merit:
|
For the Three Months Ended
|
|
For the Six Months Ended
|
|||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
Net revenues |
$ |
33,470,000 |
|
$ |
23,323,000 |
|
$ |
59,573,000 |
|
$ |
45,443,000 |
|
||||
Gross margin |
|
70 |
% |
|
72 |
% |
|
69 |
% |
|
72 |
% |
||||
Core gross margin(1) |
|
78 |
% |
|
73 |
% |
|
77 |
% |
|
74 |
% |
||||
Net loss |
|
(4,229,000 |
) |
|
(6,239,000 |
) |
|
(10,872,000 |
) |
|
(8,677,000 |
) |
||||
Core net (loss) income(1) |
|
(494,000 |
) |
|
254,000 |
|
|
(1,536,000 |
) |
|
967,000 |
|
||||
Adjusted EBITDA(1) |
|
11,005,000 |
|
|
4,505,000 |
|
|
16,347,000 |
|
|
9,445,000 |
|
||||
Basic net loss per share |
|
(0.14 |
) |
|
(0.23 |
) |
|
(0.36 |
) |
|
(0.32 |
) |
||||
Diluted net loss per share |
|
(0.14 |
) |
|
(0.23 |
) |
|
(0.36 |
) |
|
(0.32 |
) |
||||
Core basic net (loss) income per share(1) |
|
(0.02 |
) |
|
0.01 |
|
|
(0.05 |
) |
|
0.04 |
|
||||
Core diluted net (loss) income per share(1) |
|
(0.02 |
) |
|
0.01 |
|
|
(0.05 |
) |
|
0.03 |
|
(1) |
Core gross margin, core net (loss) income, core basic and diluted net (loss) income per share (collectively, “Core Results”), and Adjusted EBITDA are non GAAP measures. For additional information, including a reconciliation of such Core Results and Adjusted EBITDA to the most directly comparable measures presented in accordance with GAAP, see the explanation of non-GAAP measures and reconciliation tables in the financial tables section. |
Conference Call and Webcast
The Company’s management team will host a conference call and live webcast today at 4:45 p.m. Eastern Time to discuss the second quarter 2023 results and provide a business update. To participate in the call, see details below:
Conference Call Details: |
|
Date: |
Wednesday, August 9, 2023 |
Time: |
4:45 p.m. Eastern time |
Participant Dial-in: |
1-833-953-2434 ( |
Replay Dial-in (Passcode 3750229): (telephonic replay through August 16, 2023) |
1-877-344-7529 ( |
Webcast: (online replay through August 9, 2024) |
About Harrow
Harrow Health, Inc. (Nasdaq: HROW) is a leading eyecare pharmaceutical company engaged in the discovery, development, and commercialization of innovative ophthalmic pharmaceutical products for the U.S. market. Harrow helps
Forward-Looking Statements
This press release contains “forward-looking statements” within the meaning of the
HARROW HEALTH, INC. CONDENSED CONSOLIDATED BALANCE SHEETS |
||||||
|
June 30,
|
December 31,
|
||||
(unaudited) |
||||||
ASSETS |
||||||
Cash and cash equivalents |
$ |
22,754,000 |
$ |
96,270,000 |
||
All other current assets |
|
37,542,000 |
|
21,990,000 |
||
Total current assets |
|
60,296,000 |
|
118,260,000 |
||
All other assets |
|
163,693,000 |
|
39,118,000 |
||
TOTAL ASSETS |
$ |
223,989,000 |
$ |
157,378,000 |
||
|
||||||
LIABILITIES AND STOCKHOLDERS' EQUITY |
||||||
Current liabilities |
$ |
23,011,000 |
$ |
18,632,000 |
||
Loans payable, net of current portion and unamortized debt discount |
|
169,712,000 |
|
104,174,000 |
||
All other liabilities |
|
9,214,000 |
|
7,332,000 |
||
TOTAL LIABILITIES |
|
201,937,000 |
|
130,138,000 |
||
TOTAL STOCKHOLDERS' EQUITY |
|
22,052,000 |
|
27,240,000 |
||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY |
$ |
223,989,000 |
$ |
157,378,000 |
HARROW HEALTH, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
|
For the Three Months Ended
|
|
For the Six Months Ended
|
|||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
|||||||||
Total revenues |
$ |
33,470,000 |
|
$ |
23,323,000 |
|
$ |
59,573,000 |
|
$ |
45,443,000 |
|
||||
Cost of sales |
|
10,000,000 |
|
|
6,534,000 |
|
|
18,271,000 |
|
|
12,497,000 |
|
||||
Gross profit |
|
23,470,000 |
|
|
16,789,000 |
|
|
41,302,000 |
|
|
32,946,000 |
|
||||
Selling, general and administrative |
|
19,957,000 |
|
|
14,185,000 |
|
|
35,845,000 |
|
|
27,583,000 |
|
||||
Research and development |
|
1,161,000 |
|
|
914,000 |
|
|
1,895,000 |
|
|
1,572,000 |
|
||||
Total operating expenses |
|
21,118,000 |
|
|
15,099,000 |
|
|
37,740,000 |
|
|
29,155,000 |
|
||||
Income from operations |
|
2,352,000 |
|
|
1,690,000 |
|
|
3,562,000 |
|
|
3,791,000 |
|
||||
Total other expense, net |
|
6,596,000 |
|
|
7,889,000 |
|
|
14,737,000 |
|
|
12,428,000 |
|
||||
Income tax benefit (expense) |
|
15,000 |
|
|
(40,000 |
) |
|
303,000 |
|
|
(40,000 |
) |
||||
Net loss attributable to Harrow Health, Inc. |
$ |
(4,229,000 |
) |
$ |
(6,239,000 |
) |
$ |
(10,872,000 |
) |
$ |
(8,677,000 |
) |
||||
Net loss per share of common stock, basic and diluted |
$ |
(0.14 |
) |
$ |
(0.23 |
) |
$ |
(0.36 |
) |
$ |
(0.32 |
) |
HARROW HEALTH, INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
||||||||
For the Six Months Ended June 30, |
||||||||
2023 |
|
2022 |
||||||
Net cash (used in) provided by: |
|
|
||||||
Operating activities |
$ |
(3,648,000 |
) |
$ |
5,827,000 |
|
||
Investing activities |
|
(132,219,000 |
) |
|
(669,000 |
) |
||
Financing activities |
|
62,351,000 |
|
|
(887,000 |
) |
||
Net change in cash and cash equivalents |
|
(73,516,000 |
) |
|
4,271,000 |
|
||
Cash and cash equivalents at beginning of the period |
|
96,270,000 |
|
|
42,167,000 |
|
||
Cash and cash equivalents at end of the period |
$ |
22,754,000 |
|
$ |
46,438,000 |
|
Non-GAAP Financial Measures
In addition to the Company’s results of operations determined in accordance with
Adjusted EBITDA
The Company defines Adjusted EBITDA as net (loss) income, excluding the effects of stock‑based compensation and expenses, interest, taxes, depreciation, amortization, investment (loss) income, net, and, if any and when specified, other non-recurring income or expense items. Management believes that the most directly comparable GAAP financial measure to Adjusted EBITDA is net (loss) income. Adjusted EBITDA has limitations and should not be considered as an alternative to gross profit or net (loss) income as a measure of operating performance or to net cash provided by (used in) operating, investing, or financing activities as a measure of ability to meet cash needs.
The following is a reconciliation of Adjusted EBITDA, a non-GAAP measure, to the most comparable GAAP measure, net loss, for the three months and six months ended June 30, 2023, and for the same periods in 2022:
HARROW HEALTH, INC. RECONCILIATION OF NET LOSS TO ADJUSTED EBITDA |
|||||||||||||||
|
For the Three Months Ended
|
|
For the Six Months Ended
|
||||||||||||
|
2023 |
|
2022 |
|
2023 |
|
2022 |
||||||||
GAAP net loss |
$ |
(4,229,000 |
) |
$ |
(6,239,000 |
) |
$ |
(10,872,000 |
) |
$ |
(8,677,000 |
) |
|||
Stock-based compensation and expenses |
|
5,412,000 |
|
|
1,993,000 |
|
|
7,045,000 |
|
|
4,009,000 |
|
|||
Interest expense, net |
|
5,704,000 |
|
|
1,794,000 |
|
|
10,451,000 |
|
|
3,586,000 |
|
|||
Income tax expense (benefit) |
|
(15,000 |
) |
|
40,000 |
|
|
(303,000 |
) |
|
40,000 |
|
|||
Depreciation |
|
398,000 |
|
|
424,000 |
|
|
690,000 |
|
|
843,000 |
|
|||
Amortization of intangible assets |
|
2,843,000 |
|
|
398,000 |
|
|
5,050,000 |
|
|
802,000 |
|
|||
Investment loss (income), net |
|
714,000 |
|
|
6,095,000 |
|
|
(1,328,000 |
) |
|
8,842,000 |
|
|||
Other expense, net |
|
178,000 |
|
|
- |
|
|
5,614,000 |
(1) |
|
- |
|
|||
Adjusted EBITDA |
$ |
11,005,000 |
|
$ |
4,505,000 |
|
$ |
16,347,000 |
|
$ |
9,445,000 |
|
(1) |
Includes |
Core Results
Harrow Core Results, including core gross margin, core net income (loss), core operating income, core basic and diluted income (loss) per share, and core operating margin, exclude all amortization and impairment charges of intangible assets, excluding software development costs, net gains and losses on investments and equity securities, including equity method gains and losses and equity valued at fair value through profit and loss (“FVPL”), preferred stock dividends, and gains/losses on forgiveness of debt. In other periods, Core Results may also exclude fair value adjustments of financial assets in the form of options to acquire a company carried at FVPL, obligations related to product recalls, certain acquisition‑related items, restructuring charges/releases and associated items, related legal items, gains/losses on early extinguishment of debt or debt modifications, impairments of property, plant and equipment and software, as well as income and expense items that management deems exceptional and that are or are expected to accumulate within the year to be over a
The following is a reconciliation of Core Results, non-GAAP measures, to the most comparable GAAP measures for the three and six months ended June 30, 2023, and for the same periods in 2022:
For the Three Months Ended June 30, 2023 |
|||||||||||||||||
GAAP Results |
Amortization of Certain Intangible Assets |
Investment Gains |
Other Items |
Core Results |
|||||||||||||
Gross profit |
$ |
23,470,000 |
|
$ |
2,649,000 |
$ |
- |
$ |
- |
$ |
26,119,000 |
|
|||||
Gross margin |
|
70 |
% |
|
|
|
|
78 |
% |
||||||||
Operating income |
|
2,352,000 |
|
|
2,843,000 |
|
- |
|
- |
|
5,195,000 |
|
|||||
(Loss) income before taxes |
|
(4,244,000 |
) |
|
2,843,000 |
|
714,000 |
|
178,000 |
|
(509,000 |
) |
|||||
Tax benefit |
|
15,000 |
|
|
- |
|
- |
|
- |
|
15,000 |
|
|||||
Net (loss) income |
|
(4,229,000 |
) |
|
2,843,000 |
|
714,000 |
|
178,000 |
|
(494,000 |
) |
|||||
Basic and diluted loss per share ($)(1) |
|
(0.14 |
) |
|
|
|
|
(0.02 |
) |
||||||||
Weighted average number of shares of common stock outstanding, basic and diluted |
|
30,458,677 |
|
|
|
30,458,677 |
|
For the Six Months Ended June 30, 2023 |
||||||||||||||||||
GAAP Results |
Amortization of Certain Intangible Assets |
Investment Losses |
Other Items |
Core Results |
||||||||||||||
Gross profit |
$ |
41,302,000 |
|
$ |
4,694,000 |
$ |
- |
|
$ |
- |
$ |
45,996,000 |
|
|||||
Gross margin |
|
69 |
% |
|
|
|
|
77 |
% |
|||||||||
Operating income |
|
3,562,000 |
|
|
5,050,000 |
|
- |
|
|
- |
|
8,612,000 |
|
|||||
(Loss) income before taxes |
|
(11,175,000 |
) |
|
5,050,000 |
|
(1,328,000 |
) |
|
5,614,000 |
|
(1,839,000 |
) |
|||||
Tax benefit |
|
303,000 |
|
|
- |
|
- |
|
|
- |
|
303,000 |
|
|||||
Net (loss) income |
|
(10,872,000 |
) |
|
5,050,000 |
|
(1,328,000 |
) |
|
5,614,000 |
|
(1,536,000 |
) |
|||||
Basic and diluted loss per share ($)(1) |
|
(0.36 |
) |
|
|
|
|
(0.05 |
) |
|||||||||
Weighted average number of shares of common stock outstanding, basic and diluted |
|
30,379,354 |
|
|
|
|
|
30,379,354 |
|
For the Three Months Ended June 30, 2022 |
||||||||||||||
GAAP Results |
Amortization of Certain Intangible Assets |
Investment Gains |
Core Results |
|||||||||||
Gross profit |
$ |
16,789,000 |
|
$ |
341,000 |
$ |
- |
$ |
17,130,000 |
|
||||
Gross margin |
|
72 |
% |
|
|
|
73 |
% |
||||||
Operating income |
|
1,690,000 |
|
|
398,000 |
|
- |
|
2,088,000 |
|
||||
(Loss) income before taxes |
|
(6,199,000 |
) |
|
398,000 |
|
6,095,000 |
|
294,000 |
|
||||
Taxes |
|
(40,000 |
) |
|
- |
|
- |
|
(40,000 |
) |
||||
Net (loss) income |
|
(6,239,000 |
) |
|
398,000 |
|
6,095,000 |
|
254,000 |
|
||||
Basic (loss) earnings per share ($)(1) |
|
(0.23 |
) |
|
0.01 |
|
||||||||
Diluted (loss) earnings per share ($)(1) |
|
(0.23 |
) |
|
0.01 |
|
||||||||
Weighted average number of shares of common stock outstanding: |
|
|
|
|
||||||||||
Basic |
|
27,303,458 |
|
|
27,303,458 |
|
||||||||
Diluted |
|
27,303,458 |
|
|
28,234,177 |
|
For the Six Months Ended June 30, 2022 |
||||||||||||||
GAAP Results |
Amortization of Certain Intangible Assets |
Investment Gains |
Core Results |
|||||||||||
Gross profit |
$ |
32,946,000 |
|
$ |
682,000 |
$ |
- |
$ |
33,628,000 |
|
||||
Gross margin |
|
72 |
% |
|
|
|
74 |
% |
||||||
Operating income |
|
3,791,000 |
|
|
802,000 |
|
- |
|
4,593,000 |
|
||||
(Loss) Income before taxes |
|
(8,637,000 |
) |
|
802,000 |
|
8,842,000 |
|
1,007,000 |
|
||||
Taxes |
|
(40,000 |
) |
|
- |
|
- |
|
(40,000 |
) |
||||
Net (loss) income |
|
(8,677,000 |
) |
|
802,000 |
|
8,842,000 |
|
967,000 |
|
||||
Basic (loss) earnings per share ($)(1) |
|
(0.32 |
) |
|
0.04 |
|
||||||||
Diluted (loss) earnings per share ($)(1) |
|
(0.32 |
) |
|
0.03 |
|
||||||||
Weighted average number of shares of common stock outstanding: |
|
|
|
|
||||||||||
Basic |
|
27,265,350 |
|
|
27,265,350 |
|
||||||||
Diluted |
|
27,265,350 |
|
|
28,270,639 |
|
(1) |
Core basic and diluted (loss) earnings per share is calculated using the weighted-average number of shares of common stock outstanding during the period. Core basic and diluted (loss) earnings per share also contemplates dilutive shares associated with equity-based awards as described in Note 2 and elsewhere in the Condensed Consolidated Financial Statements included in the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2023. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20230809749685/en/
Jamie Webb, Director of Communications and Investor Relations
jwebb@harrowinc.com
615-733-4737
Source: Harrow Health, Inc.