NovaBay Pharmaceuticals Reports First Quarter 2021 Financial Results

Rhea-AI Summary

NovaBay Pharmaceuticals (NBY) reported Q1 2021 financial results, highlighting a milestone in OTC revenue with Avenova exceeding $1 million for the first time. The OTC channel now represents 79% of Avenova revenue, up from 51% year-over-year. First-quarter net product revenue was $1.8 million, with Avenova revenue up to $1.6 million from $1.5 million in 2020. Gross margin improved to 75% from 69%. The company continues to expand product offerings and digital advertising strategies, maintaining a net loss of $1.5 million, or $0.04 per share. Cash reserves stood at $10.5 million as of March 31, 2021.

Positive

• Avenova direct-to-consumer revenue exceeded $1 million for the first time.
• OTC channel now represents 79% of Avenova revenue, up from 51% year-over-year.
• Gross margin improved to 75% in Q1 2021, compared to 69% in Q1 2020.
• Introduction of new products, including Avenova Warm Eye Compress.

Negative

• Net product revenue decreased slightly from $1.9 million in Q1 2020 to $1.8 million in Q1 2021.
• Operating loss remains unchanged at $1.5 million for Q1 2021 and Q1 2020.

NovaBay^® Pharmaceuticals, Inc. (NYSE American: NBY) reports financial results for the three months ended March 31, 2021 and provides a business update.

“Our focus on the OTC channel is paying off as Avenova direct-to-consumer quarterly revenue exceeded $1 million for the first time with unit sales setting a new record. The OTC channel accounted for approximately 79% of Avenova revenue for the quarter, up from 51% for the prior-year period,” said Justin Hall, President and CEO of NovaBay Pharmaceuticals. “We continue to view the OTC channel as the greatest growth opportunity going forward and intend to capitalize on this by adding complementary products to the Avenova lineup.

“We are making excellent progress building the OTC channel this year including expanding access to Avenova in CVS stores across the country, our first brick-and-mortar retail partner. In addition, we introduced Avenova Warm Eye Compress as a line extension to assist consumers in managing dry eye, with this product now available on Amazon.com and Avenova.com,” he added. “We will be launching two additional products in the coming months and expect to accelerate Avenova sales as we roll out new digital advertising campaigns. These campaigns will come with a heightened level of sophistication for real-time monitoring of performance to maximize return on advertising spend. Our online sales channel is now a significant part of our business and our direct-to-consumer advertising is now one of our core competencies.

“We believe NovaBay is extremely well-positioned to execute on our growth strategy including our new media campaigns, with capital sufficient to fund current operations well into 2022,” Mr. Hall added. “We have stepped up our efforts to grow through strategic acquisition of ophthalmic and skincare products to expand our presence in these key markets and leverage our sales channels. This is one of our most important strategic initiatives for 2021.”

First Quarter Financial Results

Net product revenue for the first quarter of 2021 was $1.8 million, compared with $1.9 million for the first quarter of 2020 with the difference due to revenue generated from products other than Avenova in 2020. Avenova revenue for the first quarter of 2021 was $1.6 million, up from $1.5 million for the first quarter of 2020. The increase reflects the continued higher number of OTC units sold, partially offset by a decrease in the number of net units sold through pharmacy channels.

Gross margin on total net sales for the first quarter of 2021 was 75%, compared with 69% for the first quarter of 2020, with the improvement due to the decrease in revenue from products other than Avenova which are sold at a relatively lower margin.

Operating expenses for the first quarter of 2021 were $2.9 million, compared with $2.8 million for the first quarter of 2020. Sales and marketing expenses for the first quarter of 2021 were $1.7 million, compared with $1.6 million for the first quarter of 2020, with higher digital advertising costs partially offset by lower sales representative headcount in the 2021 period. General and administrative expenses for the first quarter of 2021 were $1.2 million, compared with $1.3 million for the first quarter of 2020. The 2021 period included the favorable impact of an insurance reimbursement for legal costs incurred in the prior year.

Operating loss for the first quarters of 2021 and 2020 were unchanged at $1.5 million.

Net loss for the first quarter of 2021 was $1.5 million, or $0.04 per share, compared with a net loss for the first quarter of 2020 of $1.6 million, or $0.06 per share.

NovaBay reported cash and cash equivalents of $10.5 million as of March 31, 2021, compared with $12.0 million as of December 31, 2020.

Conference Call

NovaBay management will host an investment community conference call today beginning at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss the Company’s financial and operational results and to answer questions. Shareholders and other interested parties may participate in the conference call by dialing 866-777-2509 from within the U.S. or 412-317-5413 from outside the U.S., and requesting the NovaBay Pharmaceuticals call.

A live webcast of the call will be available at http://novabay.com/investors/events and will be archived for 90 days. A replay of the call will be available beginning two hours after the call ends through May 27, 2021 by dialing 877-344-7529 from within the U.S., 855-669-9658 from Canada, or 412-317-0088 from outside the U.S., and entering the conference identification number 10155343.

About NovaBay Pharmaceuticals, Inc.: Going Beyond Antibiotics^®

NovaBay Pharmaceuticals, Inc. is a biopharmaceutical company focusing on high-quality, differentiated, anti-infective consumer products: Avenova^®, the premier antimicrobial lid and lash spray, CelleRx^® Clinical Reset™, a breakthrough product in the beauty category, and NeutroPhase^® Skin and Wound Cleanser for wound healing. NovaBay’s products are formulated with its patented, pure, stable, pharmaceutical-grade hypochlorous acid that replicates the antimicrobial chemicals used by white blood cells to fight infection. NovaBay’s hypochlorous acid products do not cause stinging or irritation, are non-toxic and non-sensitizing, making them completely safe for regular use. Avenova is the only commercial hypochlorous acid lid and lash spray product clinically proven to reduce bacterial load on ocular skin surfaces, thus effectively addressing the underlying cause of bacterial dry eye.

Forward-Looking Statements

Except for historical information herein, matters set forth in this press release are forward-looking within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, including statements about the commercial progress, potential opportunities for revenue accretion and future financial performance of NovaBay Pharmaceuticals, Inc. This release contains forward-looking statements that are based upon management’s current expectations, assumptions, estimates, projections and beliefs. These statements include, but are not limited to, statements regarding our business strategies and current product offerings, potential future product offerings including through strategic acquisitions or licensing opportunities, expanded access to our products, and any future revenue that may result from selling these products, as well as generally the Company’s expected future financial results. These forward-looking statements are identified by the use of words such as “launch,” “believe,” “grow,” “expand,” “progress,” “making,” “expect,” “will,” and “continue,” among others. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results or achievements to be materially different and adverse from those expressed in or implied by the forward-looking statements. Factors that might cause or contribute to such differences include, but are not limited to, risks and uncertainties relating to the size of the potential market for our products, the possibility that the available market for the Company’s products will not be as large as expected, the Company’s products will not be able to penetrate one or more targeted markets, and revenues will not be sufficient to meet the Company’s cash needs. Other risks relating to NovaBay’s business, including risks that could cause results to differ materially from those projected in the forward-looking statements in this press release, are detailed in NovaBay’s latest Form 10-Q/K filings with the Securities and Exchange Commission, especially under the heading “Risk Factors.” The forward-looking statements in this release speak only as of this date, and NovaBay disclaims any intent or obligation to revise or update publicly any forward-looking statement except as required by law.

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Avenova Purchasing Information
For NovaBay Avenova purchasing information:
Please call 800-890-0329 or email sales@avenova.com
Avenova.com

CelleRx Clinical Reset Purchasing Information
For NovaBay CelleRx Clinical Reset purchasing information
Please call 877-CELLERX
www.CelleRx.com

NOVABAY PHARMACEUTICALS, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands except par value amounts)
		March 31,				December 31,
		2021				2020
		(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents		$	10,508			$	11,952
Accounts receivable, net of allowance for doubtful accounts ($18 and $0 at March 31, 2021 and December 31, 2020, respectively)			1,038				1,106
Inventory, net of allowance for excess and obsolete inventory and lower of cost or estimated net realizable value adjustments ($201 and $236 at March 31, 2021 and December 31, 2020, respectively)			850				608
Prepaid expenses and other current assets			750				576
Total current assets			13,146				14,242
Operating lease right-of-use assets			350				436
Property and equipment, net			100				84
Other assets			476				476
TOTAL ASSETS		$	14,072			$	15,238
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Current liabilities:
Accounts payable		$	833			$	302
Accrued liabilities			1,851				2,115
Operating lease liabilities			396				416
Total current liabilities			3,080				2,833
Operating lease liabilities-non-current			9				87
Total liabilities			3,089

FAQ

What were NovaBay's Q1 2021 financial results?

NovaBay reported net product revenue of $1.8 million, with Avenova revenue at $1.6 million, and a net loss of $1.5 million.

How did Avenova perform in the OTC market in Q1 2021?

Avenova's direct-to-consumer revenue surpassed $1 million for the first time, representing 79% of total Avenova revenue.

What is the outlook for NovaBay's product line?

NovaBay plans to launch additional products and enhance digital advertising strategies to drive growth.

What is NovaBay's current cash position?

As of March 31, 2021, NovaBay reported cash and cash equivalents of $10.5 million.

When is the next NovaBay conference call?

NovaBay management will host a conference call on the financial results today at 4:30 p.m. Eastern time.