SenesTech Announces 2023 Financial Results
- YTD 2024 total revenue up over 80% compared to YTD 2023 driven by Evolve soft bait orders
- 2023 revenue increased to $1.2 million from $1.0 million in 2022, with growth driven by agribusiness and distribution agreements
- Successful launch of Evolve led to expanded sales channels and international reach
- Development of soft bait contraceptive product for mice targeting mid-2024 release
- Improved operational efficiencies and financials with reduced operating expenses and successful public offering in 2023
- Improvement in adjusted EBITDA performance and healthy cash position
- Net loss in 2023 was $7.7 million, although an improvement from $9.7 million in 2022
Insights
The reported 80% year-to-date revenue increase for SenesTech, driven by the Evolve™ soft bait product, signifies a substantial growth trajectory that is particularly noteworthy for stakeholders and investors. The diversification of revenue streams, marked by the product's contribution of over 50% to total revenue and its international expansion are key factors that could potentially enhance the company's market position and financial stability. The introduction of Evolve as a game-changing product could indicate a strong competitive advantage in the pest control industry, which has been seeking innovative and environmentally friendly solutions.
Moreover, the company's operational efficiencies, as demonstrated by the $2.0 million reduction in operating expenses and the $5.0 million capital raise through a public offering, are indicative of a strategic approach to financial management. The exercise of $1.0 million in warrants also suggests investor confidence in the company's future. These financial maneuvers could lead to improved liquidity and a strengthened balance sheet, which are critical for sustaining growth and potentially weathering market volatility.
SenesTech's strategic vendor approval with a major hardware retailer and the expansion into multiple international markets, including Hong Kong and Australia, demonstrate a proactive market penetration strategy. This expansion not only diversifies the company's geographic risk but also taps into new customer segments, which is crucial for long-term growth. The agricultural sector's adoption of the product, as indicated by new distribution agreements, suggests that SenesTech is effectively capitalizing on industry-specific needs for sustainable rodent control solutions.
The company's focus on a new contraceptive product for mice aligns with market demands for comprehensive rodent control solutions. If successful, this could further solidify the company's market presence and create additional revenue streams. The anticipation of this product's release could generate investor interest and positively influence market perceptions of the company's innovation capabilities.
The use of SenesTech's EPA-registered contraceptive for both male and female rats, ContraPest® and the development of a similar product for mice, represents a significant scientific advancement in rodent fertility control. The company's ability to innovate within regulatory frameworks, such as the EPA's minimum risk rules, is crucial for maintaining a competitive edge in the biotechnology and pest control industries. The focus on creating environmentally friendly and humane pest control solutions aligns with increasing regulatory and consumer demands for sustainable practices.
SenesTech's improved net loss figures and gross profit margins, despite new product introduction costs, reflect efficient management and a potentially scalable business model. A critical aspect for investors to monitor will be the company's ability to maintain profitability as it scales up, especially given the capital-intensive nature of biotech research and product development.
YTD 2024 total revenue up more than
"During 2023, we executed on a number of key initiatives that will be the foundation to drive growth into the future, most notably was the development of Evolve, our all-new soft bait product that was launched on a limited basis at the end of 2023," commented Joel Fruendt, President and CEO of SenesTech. "Since the full launch of Evolve in January 2024, we have seen a significant uptick in interest and orders from a wide range of sales channels and geographies. For instance, we were recently approved as a vendor for a major nationwide hardware retailer; we have signed distribution and stocking agreements for grain management and open field agricultural applications; and we have expanded our geographical reach outside
Year-to-date 2024 total revenue (through mid-February 2024) is up more than
"It is increasingly clear that Evolve is a game changing product that will be a key driver to our revenue growth in 2024," Fruendt continued.
Looking back at 2023, revenue was
Following the successful launch of Evolve for rats, the Company is working on an enhanced form factor and dosing of a soft bait contraceptive product for mice. The product is expected to utilize the same active ingredient with its documented record of efficacy and be designated under the EPA's minimum risk rules.
"A product for the control of mice is a logical extension of our rodent fertility control solutions," Fruendt continued. "Our product development team is hard at work with a goal to have a product on the market by mid-2024."
Tom Chesterman, CFO of SenesTech, added, "We continue to focus on driving operational efficiencies across the organization. Over the course of 2023, we improved operating expenses by nearly
Year End 2023 Highlights
- Revenue during 2023 was
$1.2 million $1.0 million 17% .
- Gross profit during 2023 was
$539,000 $464,000 45.2% in 2023 compared to45.5% in 2022. Gross profit margin for 2023 excluding the impact from new product introductions was49.3% .
- Net loss during 2023 was
$7.7 million $9.7 million $1.9 million
- Adjusted EBITDA loss, which is a non-GAAP measure of operating performance, for 2023 was
$6.9 million $8.5 million $1.5 million
- Cash at the end of December 2023 was
$5.4 million
Use of Non-GAAP Measure
Adjusted EBITDA is a non-GAAP measure. However, this measure is not intended to be a substitute for those financial measures reported in accordance with GAAP. Adjusted EBITDA has been included because management believes that, when considered together with the GAAP figures, it provides meaningful information related to our operating performance and liquidity and can enhance an overall understanding of financial results and trends. Adjusted EBITDA may be calculated by us differently than other companies that disclose measures with the same or similar term. See our attached financials for a reconciliation of this non-GAAP measure to the nearest GAAP measure.
Conference Call Details
Date and Time: Wednesday, February 21, 2024, at 5:00 pm ET
Call-in Information: Interested parties can access the conference call by dialing (844) 308-3351 or (412) 317-5407.
Live Webcast Information: Interested parties can access the conference call via a live Internet webcast, which is available in the Investor Relations section of the Company's website at https://app.webinar.net/KODd6Vn6ApQ or http://senestech.investorroom.com/.
Replay: A teleconference replay of the call will be available for seven days at (877) 344-7529 or (412) 317-0088, replay access code 3232725. A webcast replay will be available in the Investor Relations section of the Company's website at http://senestech.investorroom.com/ for 90 days.
About SenesTech
We are committed to improving the health of the world by humanely managing animal pest populations through fertility control. We are experts in fertility control to manage animal pest populations. We invented ContraPest, the only
For more information visit https://senestech.com/.
Safe Harbor Statement
This press release contains "forward-looking statements" within the meaning of federal securities laws, and we intend that such forward-looking statements be subject to the safe harbor created thereby. Such forward-looking statements include, among others, our belief that our execution on a number of key initiatives during 2023, will be the foundation to drive growth into the future, most notably was the development of Evolve, our all-new soft bait product that was launched on a limited basis at the end of 2023; our belief that it is increasingly clear that Evolve is a game-changing product that will be a key driver to our sales growth in 2024; our development of a soft bait contraceptive product for mice, which is expected to utilize the same active ingredient with its documented record of efficacy and be designated under the EPA's minimum risk rules; our belief that a product for the control of mice is a logical extension of our rodent fertility control solutions; our goal to have a contraceptive product for mice on the market by mid-2024; our continued focus on driving operational efficiencies across the organization; and our optimism that as we continue to execute our business plan, the remaining warrants from the November 2023 offering will be a source of cash over the coming quarters. Forward-looking statements may describe future expectations, plans, results or strategies and are often, but not always, made through the use of words such as "believe," "may," "future," "plan," "will," "should," "expect," "anticipate," "eventually," "project," "estimate," "continuing," "intend" and similar words or phrases. You are cautioned that such statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from those reflected by such forward-looking statements. Such factors include, among others, the successful commercialization of our products; market acceptance of our products; our financial performance, including our ability to fund operations; our ability to regain and maintain compliance with Nasdaq's continued listing requirements; regulatory approval and regulation of our products; and other factors and risks identified from time to time in our filings with the Securities and Exchange Commission, including our Annual Report on Form 10-K for the fiscal year ended December 31, 2023. All forward-looking statements contained in this press release speak only as of the date on which they were made and are based on management's assumptions and estimates as of such date. Except as required by law, we do not undertake any obligation to publicly update any forward-looking statements, whether as a result of the receipt of new information, the occurrence of future events or otherwise.
CONTACT:
Investors: Robert Blum, Lytham Partners, LLC, 602-889-9700, senestech@lythampartners.com
Company: Tom Chesterman, Chief Financial Officer, SenesTech, Inc., 928-779-4143
SENESTECH, INC. BALANCE SHEETS (In thousands, except share and per share data) (Unaudited) | |||
As of December 31, | |||
2023 | 2022 | ||
ASSETS | |||
Current assets: | |||
Cash and cash equivalents | $ 5,395 | $ 4,775 | |
Accounts receivable, net | 95 | 113 | |
Prepaid expenses | 388 | 378 | |
Inventory, net | 795 | 853 | |
Total current assets | 6,673 | 6,119 | |
Right to use assets, operating leases | 210 | 347 | |
Property and equipment, net | 388 | 294 | |
Other noncurrent assets | 22 | 22 | |
Total assets | $ 7,293 | $ 6,782 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current liabilities: | |||
Accounts payable | $ 150 | $ 540 | |
Accrued expenses | 368 | 560 | |
Current portion of operating lease liability | 217 | 180 | |
Current portion of notes payable | 33 | — | |
Deferred revenue | 18 | 44 | |
Total current liabilities | 786 | 1,324 | |
Operating lease liability, less current portion | — | 179 | |
Notes payable, less current portion | 156 | — | |
Total liabilities | 942 | 1,503 | |
Stockholders' equity: | |||
Common stock | 5 | — | |
Additional paid-in capital | 136,259 | 127,482 | |
Accumulated deficit | (129,913) | (122,203) | |
Total stockholders' equity | 6,351 | 5,279 | |
Total liabilities and stockholders' equity | $ 7,293 | $ 6,782 | |
SENESTECH, INC. STATEMENTS OF OPERATIONS (In thousands, except share and per share data) (Unaudited) | ||||
Years Ended December 31, | ||||
2023 | 2022 | |||
Product sales, net | $ 1,193 | $ 1,019 | ||
Cost of sales | 654 | 555 | ||
Gross profit | 539 | 464 | ||
Operating expenses: | ||||
Research and development | 1,228 | 1,859 | ||
Selling, general and administrative | 7,043 | 8,279 | ||
Total operating expenses | 8,271 | 10,138 | ||
Loss from operations | (7,732) | (9,674) | ||
Other income (expense): | ||||
Interest income | 26 | 7 | ||
Interest expense | (4) | (2) | ||
Miscellaneous expense | — | (26) | ||
Other income (expense), net | 22 | (21) | ||
Net loss | $ (7,710) | $ (9,695) | ||
Weighted average shares outstanding — basic and diluted | 669,861 | 65,473 | ||
Loss per share — basic and diluted | $ (11.51) | $ (148.08) | ||
SenesTech Inc. Itemized Reconciliation Between Net Loss and Adjusted EBITDA (non-GAAP) (In thousands) (Unaudited) | ||||
Years Ended December 31, | ||||
2023 | 2022 | |||
Net loss (as reported, GAAP) | $ (7,710) | $ (9,695) | ||
Non-GAAP adjustments: | ||||
Interest income, net | (22) | (5) | ||
Stock-based compensation expense | 555 | 711 | ||
Severance costs | 119 | 311 | ||
Loss on sale of assets | — | 28 | ||
Depreciation expense | 135 | 183 | ||
Total non-GAAP adjustments | 788 | 1,227 | ||
Adjusted EBITDA loss (non-GAAP) | $ (6,922) | $ (8,467) | ||
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SOURCE SenesTech, Inc.
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