NEXGEL Reports First Quarter 2024 Revenue of $1.27 Million, an Increase of 104% Year-Over-Year
NEXGEL (NASDAQ: NXGL) announced its financial results for Q1 2024, reporting a 104% YoY revenue increase to $1.27 million, driven by 58% growth in contract manufacturing and 178% in consumer branded products. The gross profit for Q1 2024 was $277,000, up from a loss of $57,000 in Q1 2023. However, the company reported a net loss of $905,000, up from $807,000 in the same period last year. NEXGEL is investing in significant growth opportunities, including expanding its Texas facility and launching products in Europe. The company ended the quarter with a cash balance of $2.4 million.
- Revenue increased by 104% YoY to $1.27 million.
- Contract manufacturing revenue grew by 58%.
- Consumer branded product revenue surged by 178%.
- Gross profit increased to $277,000 from a loss of $57,000 last year.
- Gross profit margin improved to 21.9% from a negative 9.2% YoY.
- Company is nearly complete with capacity expansion of Texas facility.
- Expecting product launches with Abbvie and others.
- Anticipating the first batch of consumer branded products in Europe.
- Cash balance of $2.4 million as of March 31, 2024.
- Net loss increased to $905,000 from $807,000 YoY.
- Cost of revenues rose by 46.1% to $989,000.
- Selling, general, and administrative expenses increased by 43.8% to $1.1 million.
- Research and development expenses decreased significantly to $2,000.
- Net cash usage for investment due to non-recurring strategic investments and acquisition costs.
Insights
NEXGEL's first quarter 2024 financial results show a notable 104% increase in revenue year-over-year, reaching
One key highlight is the improvement in gross profit margin to
Investors should closely monitor the company's progress in launching its consumer branded products in Europe and its ability to sustain revenue growth while managing costs. The substantial increase in selling, general and administrative expenses by
Key takeaway for investors: While the revenue growth and improved gross margins are promising, the bottom line remains in the red. NEXGEL's future performance will depend on its ability to convert these strategic investments into sustainable profitability.
The significant year-over-year revenue growth for NEXGEL indicates solid market acceptance and demand for their hydrogel products. The 178% growth in the consumer branded segment is particularly noteworthy, suggesting robust consumer interest and potentially successful product differentiation in a competitive market.
The upcoming product launches in Europe, pending necessary certifications, could open new revenue streams and diversify their market presence, reducing reliance on the US market. However, the success of these launches will hinge on effective market entry strategies and local market receptivity.
However, the increased expenses in advertising, marketing and professional fees should be carefully watched. While these are critical for market penetration and brand-building efforts, they can also strain the company's financials if not appropriately managed. The market should keep an eye on the effectiveness of these expenditures in driving sales and market share growth.
Insight for investors: The company has shown potential in capturing market demand, but its ability to manage costs while expanding into new markets will be important for long-term success. Monitoring the outcomes of their strategic investments and European market entry will be key for assessing future growth potential.
LANGHORNE, Pa., May 13, 2024 (GLOBE NEWSWIRE) -- NEXGEL, Inc. (“NEXGEL” or the “Company”) (NASDAQ: “NXGL”), a leading provider of ultra-gentle, high-water-content hydrogel products for healthcare and consumer applications, today announced its financial results for the first quarter ended March 31, 2024.
Adam Levy, NEXGEL’s Chief Executive Officer, commented, “Following a record year of growth in 2023, I am pleased to report our first quarter financial results that demonstrate steady growth year-over-year and preparedness for significant growth levers we expect in 2024. Revenue for the quarter grew
First Quarter 2024 Financial Highlights
For the quarter ended March 31, 2024, revenue totaled
Gross profit totaled
Gross profit margin for the first quarter of 2024 was
Cost of revenues increased by
Selling, general and administrative expenses increased by
Research and development expenses decreased by
Net loss for the three months ended March 31, 2024, was
As of March 31, 2024, the Company had a cash balance of
As of March 31, 2024, NEXGEL had 6,227,624 shares of common stock outstanding.
First Quarter 2024 Financial Results Conference Call
Date: May 13, 2024
Time: 4:30 P.M. ET
Live Call: + 1-800-343-5419 (U.S. Toll Free) or + 1-203-518-9731 (International)
Webcast: Events and Presentations
For interested individuals unable to join the conference call, a replay will be available through May 27, 2024, by dialing + 1-844-512-2921 (U.S. Toll Free) or + 1-412-317-6671 (International). Participants must use the following code to access the replay of the call: 11155952. An archived version of the webcast will also be available for 90 days.
About NEXGEL, INC.
NEXGEL is a leading provider of healthcare, beauty, and over-the-counter (OTC) products including ultra-gentle, high-water-content hydrogels. Based in Langhorne, Pa., the Company has developed and manufactured electron-beam, cross-linked hydrogels for over two decades. NEXGEL brands include Silverseal, Hexagels, Turfguard, Kenkoderm, and Dermablock. Additionally, NEXGEL has strategic contract manufacturing relationships with leading consumer healthcare companies.
Forward-Looking Statement
This press release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”) (which Sections were adopted as part of the Private Securities Litigation Reform Act of 1995). Statements preceded by, followed by or that otherwise include the words “believe,” “anticipate,” “estimate,” “expect,” “intend,” “plan,” “project,” “prospects,” “outlook,” and similar words or expressions, or future or conditional verbs, such as “will,” “should,” “would,” “may,” and “could,” are generally forward-looking in nature and not historical facts. These forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company's actual results, performance, or achievements to be materially different from any anticipated results, performance, or achievements for many reasons. The Company disclaims any intention to, and undertakes no obligation to, revise any forward-looking statements, whether as a result of new information, a future event, or otherwise. For additional risks and uncertainties that could impact the Company's forward-looking statements, please see the Company's Annual Report on Form 10-K for the year ended December 31, 2022, including but not limited to the discussion under “Risk Factors” therein, which the Company filed with the SEC and which may be viewed at http://www.sec.gov/.
Investor Contacts:
Valter Pinto, Managing Director
KCSA Strategic Communications
212.896.1254
valter@kcsa.com
NEXGEL, INC
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 2024 AND DECEMBER 31, 2023
(Unaudited)
(in thousands, except share and per share data)
| March 31, 2024 | December 31, 2023 | |||||||
| ASSETS: | ||||||||
| Current Assets: | ||||||||
| Cash | $ | 2,419 | $ | 2,700 | ||||
| Accounts receivable, net | 739 | 633 | ||||||
| Inventory | 1,369 | 1,319 | ||||||
| Prepaid expenses and other current assets | 336 | 400 | ||||||
| Total current assets | 4,863 | 5,052 | ||||||
| Goodwill | 1,128 | 1,128 | ||||||
| Intangibles, net | 302 | 326 | ||||||
| Property and equipment, net | 2,194 | 1,499 | ||||||
| Operating lease - right of use asset | 1,803 | 1,855 | ||||||
| Other assets | 95 | 95 | ||||||
| Total assets | $ | 10,385 | $ | 9,955 | ||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts payable | $ | 1,053 | $ | 1,233 | ||||
| Accrued expenses and other current liabilities | 111 | 398 | ||||||
| Deferred revenue | 250 | 20 | ||||||
| Current portion of note payable | 87 | 80 | ||||||
| Warrant liability | 255 | 146 | ||||||
| Contingent consideration liability | 439 | 439 | ||||||
| Financing lease liability, current portion | 55 | - | ||||||
| Operating lease liabilities, current portion | 233 | 233 | ||||||
| Total current liabilities | 2,483 | 2,549 | ||||||
| Operating lease liabilities, net of current portion | 1,682 | 1,727 | ||||||
| Financing lease liability, net of current portion | 352 | - | ||||||
| Notes payable, net of current portion | 663 | 513 | ||||||
| Total liabilities | 5,180 | 4,789 | ||||||
| Commitments and Contingencies (Note 15) | - | - | ||||||
| Preferred stock, par value | - | - | ||||||
| Common stock, par value | 6 | 6 | ||||||
| Additional paid-in capital | 20,350 | 19,406 | ||||||
| Accumulated deficit | (15,568 | ) | (14,715 | ) | ||||
| Total NexGel stockholders’ equity | 4,788 | 4,697 | ||||||
| Non-controlling interest in joint venture | 417 | 469 | ||||||
| Total stockholders’ equity | 5,205 | 5,166 | ||||||
| Total liabilities and stockholders’ equity | $ | 10,385 | $ | 9,955 | ||||
NEXGEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(Unaudited)
(in thousands, except share and per share data)
| Three months ended | |||||||||||
| March 31, | |||||||||||
| 2024 | 2023 | ||||||||||
| Revenues, net | $ | 1,266 | $ | 620 | |||||||
| Cost of revenues | 989 | 677 | |||||||||
| Gross margin (loss) | 277 | (57 | ) | ||||||||
| Operating expenses | |||||||||||
| Research and development | 2 | 29 | |||||||||
| Selling, general and administrative | 1,146 | 797 | |||||||||
| Total operating expenses | 1,148 | 826 | |||||||||
| Loss from operations | (871 | ) | (883 | ) | |||||||
| Other income (expense) | |||||||||||
| Interest income (expense), net | (15 | ) | (1 | ) | |||||||
| Changes in fair value of warrant liability and warrant modification expense | (53 | ) | 66 | ||||||||
| Gain on investment in marketable securities | 34 | 7 | |||||||||
| Other income | — | 4 | |||||||||
| Total other income (expense), net | (34 | ) | 76 | ||||||||
| Loss before income taxes | (905 | ) | (807 | ) | |||||||
| Income tax expense | — | — | |||||||||
| Net loss | (905 | ) | (807 | ) | |||||||
| Less: Income (loss) attributable to non-controlling interest in joint venture | (52 | ) | 7 | ||||||||
| Net loss attributable to NexGel stockholders | $ | (853 | ) | $ | (814 | ) | |||||
| Net loss per common share - basic | $ | (0.14 | ) | $ | (0.15 | ) | |||||
| Net loss per common share - diluted | $ | (0.14 | ) | $ | (0.15 | ) | |||||
| Weighted average shares used in computing net loss per common share - basic | 5,982,062 | 5,586,326 | |||||||||
| Weighted average shares used in computing net loss per common share – diluted | 5,982,062 | 5,586,326 | |||||||||
NEXGEL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 2024 AND 2023
(Unaudited)
(in thousands)
| Three Months Ended March 31, | |||||||||||||
| 2024 | 2023 | ||||||||||||
| Operating Activities | |||||||||||||
| Net loss | $ | (853 | ) | $ | (814 | ) | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||||
| Income (loss) attributable to non-controlling interest in joint venture | (52 | ) | 7 | ||||||||||
| Depreciation and amortization | 62 | 31 | |||||||||||
| Share-based compensation and restricted stock vesting | 54 | 24 | |||||||||||
| Gain on investment in marketable securities | (34 | ) | 7 | ||||||||||
| Changes in fair value of warrant liability | 53 | (66 | ) | ||||||||||
| Amortization of right of use asset | 52 | 49 | |||||||||||
| Changes in operating assets and liabilities: | |||||||||||||
| Accounts receivable | (106 | ) | (158 | ) | |||||||||
| Inventory | (50 | ) | (466 | ) | |||||||||
| Prepaid expenses and other assets | 64 | 11 | |||||||||||
| Accounts payable | (180 | ) | 722 | ||||||||||
| Accrued expenses and other current liabilities | (287 | ) | (18 | ) | |||||||||
| Deferred revenue | 230 | — | |||||||||||
| Operating lease liability | (45 | ) | (38 | ) | |||||||||
| Net Cash Used in Operating Activities | (1,092 | ) | (709 | ) | |||||||||
| Investing Activities | |||||||||||||
| Proceeds from sales of marketable securities | 34 | 485 | |||||||||||
| Capital expenditures | (152 | ) | (88 | ) | |||||||||
| Net Cash Provided by (Used in) Investing Activities | (118 | ) | 397 | ||||||||||
| Financing Activities | |||||||||||||
| Proceeds from rights offering, net of expenses | 946 | — | |||||||||||
| Principal payment on financing lease liability | (9 | ) | — | ||||||||||
| Principal payments of notes payable | (8 | ) | (2 | ) | |||||||||
| Net Cash Provided by (Used in) Financing Activities | 929 | (2 | ) | ||||||||||
| Net Decrease in Cash | (281 | ) | (314 | ) | |||||||||
| Cash – Beginning of period | 2,700 | 1,101 | |||||||||||
| Cash – End of period | $ | 2,419 | $ | 787 | |||||||||
| Supplemental Disclosure of Cash Flows Information | |||||||||||||
| Cash paid during the year for: | |||||||||||||
| Interest | $ | 10 | $ | — | |||||||||
| Taxes | $ | — | $ | — | |||||||||
| Supplemental Non-cash Investing and Financing activities | |||||||||||||
| Property and equipment financed under notes payable | $ | 165 | $ | — | |||||||||
| Property and equipment financed under financing leases | $ | 416 | $ | — | |||||||||
| Property and equipment contributed as capital investment to JV | $ | — | $ | 500 | |||||||||
| ROU asset and operating lease liabilities recognized upon consolidation of JV | $ | — | $ | 334 | |||||||||
FAQ
What was NEXGEL's revenue for Q1 2024?
How much did NEXGEL's contract manufacturing revenue grow in Q1 2024?
What was the growth in consumer branded products for NEXGEL in Q1 2024?
What was NEXGEL's gross profit margin for Q1 2024?
What was NEXGEL's net loss for Q1 2024?
What were NEXGEL's selling, general, and administrative expenses for Q1 2024?
What was NEXGEL's cash balance as of March 31, 2024?
What significant investments is NEXGEL making in 2024?
