Healthy Extracts Reports Record Q3 2024; Issues Guidance for 20%+ Growth and Positive Cash Flow for Full Year 2024

Rhea-AI Summary

Healthy Extracts (HYEX) reported record Q3 2024 results with net revenue increasing 21% year-over-year to $745,000. The company achieved a 22% increase in gross profit to $602,000, with gross margin improving to 80.9%. Net income reached $355,000 or $0.12 per share, compared to a loss in the previous year. Subscription-based sales showed strong growth, with Amazon 'Subscribe & Save' customers up 63% and direct-to-consumer subscriptions up 97% year-over-year. The company maintains its guidance for 20%+ revenue growth in 2024, expecting to exceed $3 million with positive cash flow.

Positive

• Net revenue increased 21% to record $745,000 in Q3
• Gross profit up 22% to $602,000 with improved margin of 80.9%
• Operating expenses decreased 31% to $517,000
• Net income of $355,000 vs previous year loss
• Subscription customer base grew significantly (Amazon +63%, Direct +97%)
• Reduced outstanding debt by $97,000
• Four consecutive quarters of positive cash flow

Negative

• working capital due to challenging financial markets
• Net loss of $394,000 for the first nine months of 2024

• Net revenue up 21% year-over-year to record third-quarter high.

• Achieved fourth consecutive positive cash flow quarter while still investing in future growth.

• Growth in subscription-based sales generating an expanding recurring revenue stream.

• Record increase in subscriptions driving greater customer lifetime value (CLV).

• Outlook remains on track for more than 20% revenue growth in 2024, exceeding $3 million, and generate cash flow positive for the year.

LAS VEGAS, NV / ACCESSWIRE / November 12, 2024 / Healthy Extracts Inc. (OTCQB:HYEX), a platform for acquiring, developing, patenting, marketing, and distributing plant-based nutraceuticals that target select high-growth categories within the multibillion-dollar nutraceuticals market, reported results for the three and nine months ended September 30, 2024. All comparisons are to the year-ago period unless otherwise noted.

Q3 2024 Financial Highlights

• Net revenue increased 21% to $745,000, a record for a third quarter, which was driven primarily by consumer sales growth and increased subscription-based revenue.

• Gross profit increased 22% to $602,000 with gross margin up 50 basis points to 80.9% due to improved manufacturing efficiency and product mix.

• Operating expenses decreased 31% to $517,000.

• Reduced outstanding debt by $97,000, which brought the total debt reduction over the past two quarters to $205,000 and enabling additional capital to be applied to growth initiatives.

• Net income totaled $355,000 or $0.12 per basic and diluted share, improving from a loss of $248,000 in the same year-ago period. The increase was primarily due to a change in fair value on derivative expense. Excluding expenses related to potential acquisitions and equity offerings, regulatory compliance, stock-based compensation, change in fair value of derivative expense and interest, net income in the third quarter of 2024 totaled $117,000 or $0.04 per basic and diluted share.

• Amazon "Subscribe & Save" customers at September 30, 2024 increased 63% year-over-year to a record number of subscribers. Direct-to-consumer subscription customers (excluding Amazon) at September 30, 2024 increased 97% year-over-year. Subscription growth helps reduce customer acquisition costs, increases traction, and provides greater visibility into future revenue.

Management Commentary

"In Q3, we achieved another quarter of record-breaking revenue along with additional margin improvements and debt reduction," commented Healthy Extracts president, Duke Pitts. "This strong performance was driven by the sale of industry-leading products through our well-developed and diverse marketing channels-especially direct-to-consumer.

"The results also reflect how we achieved record-breaking Amazon sales in July and August, with this resulting from effectively targeted sales and marketing efforts for Prime Day, as well as record demand for our Amazon ‘Subscribe & Save' offerings.

"We also maintained a top three position among more than 100 competitors in Amazon's popular Citrus Bergamot category. We're looking forward to strong Black Friday and Cyber Monday events coming up later this month that we expect will take our Amazon sales to the next level.

"Given the tremendous success of our Amazon ‘Subscribe & Save' program, in July we introduced a 20% discount on monthly subscriptions on our direct-to-consumer eCommerce website, replacing our traditional Buy-2-Get-1 offers. This new offering has been well received, resulting in notable growth in subscription sign-ups.

"We see this new program helping to boost our sales and margins, as well as enable greater customer long-term retention rates. We estimate our subscription-based revenue is quickly approaching nearly a third of our overall revenue run-rate, with this supporting a significant increase in overall customer lifetime value or CLV.

"Now with our strongest fundamentals to date, including a streamlined capitalization structure, manageable debt levels, and four consecutive quarters of positive cash flow, our company is positioned exceptionally well.

"Despite navigating limited working capital due to challenging financial markets, we have maintained a consistent growth trajectory with a compound annual growth rate of approximately 25% over the last three years. Based on typical industry valuation multiples applied just to our Customer Lifetime Value (CLV), we believe our current market valuation is highly undervalued.

"For the rest of the year and into the next, we expect to continue to strengthen our top-line growth, profitability, and market share, especially as our addressable markets continue to expand. Our consistent growth momentum with our retail customers positions us well for the successful launch of new products that we're planning to roll out in the current fourth quarter. We are also in the best-ever position for making strategic, accretive acquisitions that would further accelerate our growth.

"The launch of these new products will benefit from the broad market channels we have strategically built and invested in over recent years. We believe these investments have proven to be the most effective way to create significant shareholder value. The continued pursuit of this strategy remains our top priority. Given our momentum coming into the fourth quarter, we expect to report record revenue and positive cash flow for the year, with this setting the stage for accelerated growth in 2025."

Financial Outlook

For the remainder of 2024, the company expects to remain on track for another year of record revenue at more than $3.0 million, representing a 20%+ year-over-year gain, and generate positive cash-flow for the year. New product introductions are expected to continue laying the way for stronger growth and greater profitability excluding non-cash expenses.

Product Outlook

Healthy Extracts' top brand ambassador and renowned fitness expert, Whitney Johns, is preparing to launch WHITNEY JOHNS™ NUTRITION on-the-go gel packs for COLLAGEN (anti-aging) in the first quarter of 2025. These products will be based on Healthy Extracts' exclusive oral delivery system and proprietary formulations.

The company is also planning to launch in the first quarter of 2025 its new BergaMet MYNUS sugar blocker, which is specially formulated to reduce up to 42% of the sugar impact from meals. The MYNUS on-the-go gel-packs will be made available under the company's exclusive U.S. and Canadian licensing and manufacturing agreement with Gelteq.

Q3 2024 Financial Summary

Net revenue in the third quarter of 2024 increased 21% to $745,000 from $614,000 in the same year-ago quarter, primarily due to consumer sales growth and increased subscription-based revenue.

Gross profit totaled $602,000 or 80.9% of net revenue as compared to $493,000 or 80.4% of net revenue in the same year-ago quarter. The 50 basis points increase in gross margin was the result of manufacturing efficiency and more favorable product mix.

Operating expenses decreased 31% to $517,000 as compared to $754,000 in the same year-ago quarter. The decrease in operating expenses was primarily due to one-time expenses in the year-ago quarter related to the company's planned uplist to Nasdaq and issuance of options and warrants that did not reoccur in the third quarter of 2024, and to a lesser extent the reduction in general operating expense in the third quarter of 2024.

Net income totaled $354,000 or $0.12 per basic and diluted share, as compared to a net loss of $248,000 or $(0.09) per basic and diluted share in the same year-ago period.

Excluding expenses related to planned acquisitions and public offerings, regulatory compliance, stock-based compensation, the change in fair value of derivative expense and interest expense, net income in the third quarter of 2024 totaled $117,000 or $0.04 per basic and diluted share versus net income of $33,000 or $0.01 per basic and diluted share.

First Nine Months of 2024 Financial Summary

Net revenue in the first nine months of 2024 increased 29% to a record $2.3 million compared to $1.8 million in the same year-ago period, primarily due to product line and distribution channel expansion.

Gross profit totaled $1.5 million or 63.9% of net revenue as compared to $1.1 million or 58.1% of net revenue in the same year-ago period. The increase in gross margin was a result of product mix sold as well as decreases in manufacturing and freight costs.

Operating expenses decreased 50% to $1.5 million compared to $3.0 million in the same year-ago period. The decrease in operating expenses was primarily due to one-time expenses in the same year-ago period related to the company's planned uplist to a Nasdaq and the issuance of options and warrants that did not reoccur in the 2024, and to a lesser extent the reduction in general operating expense in 2024.

Net loss totaled $394,000 or $(0.13) per basic and diluted share, compared to a loss of $2.1 million or $(0.72) per basic and diluted share in the same year-ago period. The improvement in net loss was primarily due to the same factors that drove improvement in the third quarter of 2024.

Excluding expenses related to the potential acquisitions and a public offering, regulatory compliance, stock compensation, change in fair value on derivative and interest expense, net income totaled $139,000 or $0.05 per basic and diluted share versus a net loss of $480,000 or $(0.16) per basic and diluted share in the same year-ago period.

About Healthy Extracts "Live Life Young Again"

Healthy Extracts Inc. is a platform for acquiring, developing, researching, patenting, marketing, and distributing plant-based nutraceuticals.

The company's subsidiaries, BergametNA™ and Ultimate Brain Nutrients™ (UBN), offer nutraceutical natural heart and brain health supplements. This includes the only heart health supplement distributed in North America containing Citrus Bergamot SuperFruit™. This superfruit has the highest known concentration of polyphenols and flavonoids.

UBN's KETONOMICS® proprietary formulations, which have been designed to enhance brain activity, focus, headache and cognitive behavior, provide many sales and intellectual property licensing opportunities.

For more information visit: healthyextractsinc.com, bergametna.com or tryubn.com.

Forward-Looking Statements and Safe Harbor Notice

All statements other than statements of historical facts included in this press release are "forward-looking statements" (as defined in the Private Securities Litigation Reform Act of 1995). Such forward-looking statements include our expectations and those statements that use forward-looking words such as "projected," "expect," "possibility" and "anticipate." The achievement or success of the matters covered by such forward-looking statements involve significant risks, uncertainties and assumptions. Actual results could differ materially from current projections or implied results. Investors should read the risk factors set forth in the Company's Annual Report on Form 10-K filed with the SEC on April 1, 2024, and future periodic reports filed with the SEC. All of the Company's forward-looking statements are expressly qualified by all such risk factors and other cautionary statements. The Company cautions that statements and assumptions made in this news release constitute forward-looking statements and make no guarantee of future performance. Forward-looking statements are based on estimates and opinions of management at the time statements are made. The information set forth herein speaks only as of the date hereof. The Company and its management undertake no obligation to revise these statements following the date of this news release.

Food & Drug Administration Disclosure

The product and formulation featured in this release is not for use by or sale to persons under the age of 12. This product should be used only as directed on the label. Consult with a physician before use if you have a serious medical condition or use prescription medications. A doctor's advice should be sought before using this and any supplemental dietary product. These statements have not been evaluated by the FDA. This product is not intended to diagnose, treat, cure or prevent any disease.

BergametNA™, Ultimate Brain Nutrients™, UBN™, Citrus Bergamot SuperFruit™ and F4T® are registered trademarks of Healthy Extracts Inc.™

Company Contact

Duke Pitts, President
Healthy Extracts Inc.
Tel (720) 463-1004
Email contact

Investor Contact

Ronald Both
CMA Investor Relations
Tel (949) 432-7566
Email contact

HEALTHY EXTRACTS INC.
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2024 AND DECEMBER 31, 2023
(Unaudited)

		SEPTEMBER 30,				DECEMBER 31,
		2024				2023
ASSETS
CURRENT ASSETS
Cash		$	100,402			$	19,441
Accounts receivable			19,766				30,440
Inventory, net			1,437,482				1,626,283
Offering costs			149,274				151,931
Right of use asset, net			25,234				71,583
Total current assets			1,732,158				1,899,678
Fixed assets			3,649				3,306
Patents/Trademarks			521,881				521,881
Deposit			16,890				16,890
Goodwill			193,260				193,260
Total other assets			735,679				735,336
TOTAL ASSETS		$	2,467,837			$	2,635,014
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Accounts payable		$	42,703			$	116,842
Accrued liabilities			187,650				215,069
Lease liabilities - current			26,187				65,229
Lease liabilities - long-term			-				9,222
Notes payable			154,254				361,093
Notes payable - related party			178,366				83,366
Convertible debt, net of discount			566,711				608,601
Accrued interest payable			61,566				64,386
Accrued interest payable - related party			19,854				2,465
Derivative liabilities			427,586				154,150
Total current and total liabilities			1,664,876				1,680,424
STOCKHOLDERS' EQUITY
Preferred stock, $0.001 par value, 75,000,000 shares authorized, none and none shares issued and outstanding, respectively			-				-
Common stock, $0.001 par value, 50,000,000 shares authorized, 2,989,406 shares issued and outstanding as of September 30, 2024, and 2,954,104 shares issued and outstanding as of December 31, 2023, respectively			354,532				354,492
Additional paid-in capital			19,247,244				18,999,770
Treasury stock, at cost, 4,166 shares, respectively			(5,400	)			-
Accumulated deficit			(18,793,415	)			(18,399,673	)
Total stockholders' equity			802,961				954,590
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY		$	2,467,837			$	2,635,014

HEALTHY EXTRACTS INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE AND NINE MONTHS ENDING SEPTEMBER 30, 2024 AND 2023
(Unaudited)

		FOR THE THREE MONTHS ENDING								FOR THE NINE MONTHS ENDING
		SEPTEMBER 30								SEPTEMBER 30
		2024				2023				2024				2023
REVENUE
Revenue		$	744,916			$	613,541			$	2,342,091			$	1,816,968
Net revenue			744,916				613,541				2,342,091				1,816,968
COST OF REVENUE
Cost of goods sold			142,456				120,309				845,185				760,825
Total cost of revenue			142,456				120,309				845,185				760,825
GROSS PROFIT			602,460				493,233				1,496,906				1,056,143
OPERATING EXPENSES
General and administrative			517,068				754,026				1,485,945				2,977,998
Total operating expenses			517,068				754,026				1,485,945				2,977,998
OTHER INCOME (EXPENSE)
Interest expense, net of interest income			(39,963	)			(24,502	)			(131,268	)			(138,774	)
Change in fair value on derivative			309,037				37,371				(273,436	)			(33,687	)
Total other income (expense)			269,074				12,869				(404,703	)			(172,461	)
Net income/(loss) before income tax provision			354,466				(247,924	)			(393,742	)			(2,094,316	)
NET INCOME/(LOSS)		$	354,466			$	(247,924	)		$	(393,742	)		$	(2,094,316	)
Income/(Loss) per share - basic and diluted		$	0.12			$	(0.09	)		$	(0.13	)		$	(0.72	)
Weighted average number of shares outstanding - basic and diluted			2,974,892				2,902,370				2,974,892				2,915,410

SOURCE: HEALTHY EXTRACTS INC.

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FAQ

What was Healthy Extracts (HYEX) revenue growth in Q3 2024?

Healthy Extracts reported a 21% year-over-year revenue growth to $745,000 in Q3 2024.

What is Healthy Extracts (HYEX) revenue guidance for 2024?

The company expects to exceed $3 million in revenue for 2024, representing over 20% year-over-year growth.

How much did Healthy Extracts (HYEX) subscription base grow in Q3 2024?

Amazon Subscribe & Save customers increased 63% year-over-year, while direct-to-consumer subscriptions grew 97%.

What was Healthy Extracts (HYEX) net income in Q3 2024?

Net income was $355,000 or $0.12 per share, improving from a loss of $248,000 in the same year-ago period.