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Thorne HealthTech Reports Second Quarter 2023 Results

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Thorne HealthTech, Inc. (NASDAQ: THRN) reports a 33.1% increase in net sales to $72.7 million and a 35.7% growth in gross profit to $40.6 million for the second quarter of 2023. The company also raised its full-year guidance for net sales and gross margin, with updated ranges of $285 million to $290 million for net sales and 50% to 52% for gross profit as a % of net sales. Thorne HealthTech achieved a net income of $4.4 million and adjusted EBITDA of $12.5 million, leading to a diluted EPS of $0.08 and adjusted diluted EPS of $0.15. Additionally, the company earned CE Mark certification for its at-home blood sampling device in the European Union.
Positive
  • 33.1% increase in net sales to $72.7 million
  • 35.7% growth in gross profit to $40.6 million
  • Raised full-year guidance for net sales and gross margin
Negative
  • None.

Record Net Sales With Growth of 33.1%; Raises Full-Year Guidance Midpoints for Net Sales and Gross Margin

NEW YORK, Aug. 8, 2023  /PRNewswire/ -- Thorne HealthTech, Inc. ("Thorne HealthTech", "Thorne" or the "Company") (NASDAQ: THRN), a leader in delivering personalized, innovative solutions that empower individuals to live healthier, longer lives, today announced its financial results for the second quarter ended June 30, 2023.

THT Logo (PRNewsfoto/Thorne HealthTech, Inc.)

Second Quarter Highlights:

  • Net sales grew 33.1% year-over-year to $72.7 million, with direct-to-consumer ("DTC") sales growth of 39.3%
  • Gross profit grew 35.7% year-over-year to $40.6 million; gross profit as a % of net sales increased year-over-year to 55.9%.
  • Net income attributable to Thorne HealthTech, Inc. of $4.4 million; adjusted EBITDA1 of $12.5 million
  • Diluted earnings per share ("EPS") of $0.08; adjusted diluted EPS1 of $0.15
  • Raises midpoints of full-year 2023 guidance ranges for each of net sales and gross profit as a % of net sales, resulting in updated guidance ranges for net sales of $285 million to $290 million and gross profit as a % of net sales of 50% to 52%
  • Raises full-year 2023 guidance range for adjusted EPS1 to $0.26 to $0.32 based on updated estimated applicable statutory tax rates in the second quarter
  • At-home blood sampling device earned CE (Conformite Europeenne) Mark certification in the European Union

1Adjusted EBITDA and adjusted diluted EPS are non-GAAP measures. Important disclosures about, and reconciliations of, non-GAAP measures to their most directly comparable GAAP measures, including adjusted EBITDA, adjusted net income and adjusted diluted earnings EPS are provided in the "Non-GAAP Financial Measures" section of this press release.

"The Company delivered another strong financial performance in the second quarter, achieving record net sales and adjusted EBITDA," said Paul Jacobson, Thorne HealthTech's chairman and CEO. "Robust demand for our premium wellness offerings resulted in 33 percent sales growth, with favorable gross margin contributions from direct-to-consumer channel strength, pricing, product rationalization, and lower overhead. Looking ahead to the second half of the year, with our plant expansion on track, the core business is well positioned for continued momentum as we drive innovation into the product portfolio and increase brand awareness through our recently launched marketing campaign. As a result, we are raising the midpoints of our guidance ranges for sales and gross margin."

Net Sales

The following tables provide a summary of sales by channel for the three and six months ended June 30, 2023, compared to the three and six months ended June 30, 2022:



Three Months Ended June 30,




Amounts



Year-Over-Year



As % of Net Sales




2023



2022



$ Change



% Change



2023



2022


(dollars in thousands)



















DTC


$

36,800



$

26,425



$

10,375




39.3

%



50.6

%



48.4

%

Professional/B2B (1)



35,915




28,216




7,699




27.3

%



49.4

%



51.6

%

Net Sales (2)


$

72,715



$

54,641



$

18,074




33.1

%



100.0

%



100.0

%






















Six Months Ended June 30,




Amounts



Year-Over-Year



As % of Net Sales




2023



2022



$ Change



% Change



2023



2022


(dollars in thousands)



















DTC


$

70,617



$

50,416



$

20,201




40.1

%



51.2

%



46.4

%

Professional/B2B (1)



67,336




58,255




9,081




15.6

%



48.8

%



53.6

%

Net Sales (2)


$

137,953



$

108,671



$

29,282




26.9

%



100.0

%



100.0

%



(1)

"Professional" generally means the Company's network of health professionals; and "B2B" generally means business-to-business customers.

(2)

As disclosed in prior quarters, we reclassified certain amounts in the condensed consolidated statements of operations as a result of certain immaterial classification errors related to prior interim periods. For the three months ended June 30, 2022, such reclassification reflected a decrease of $1.4 million to net sales, a decrease of $1.4 million to marketing expenses, and a net decrease of $0 to selling, general, and administrative expenses. For the six months ended June 30, 2022,  such reclassification reflected a decrease of $2.1 million to net sales, a decrease of $2.4 million to marketing expenses, and a net increase of $0.3 million to selling, general, and administrative expenses. There was no impact of the reclassification adjustments to the balance sheets, statements of cash flows or key operating measures such as operating income, net income, adjusted EBITDA, adjusted net income, earnings per share or adjusted earnings per share for any period as a result of the reclassifications.

 

The following table provides a summary of the Company's annual life-time value ("LTV") to customer acquisition cost ("CAC") ratio for the three and six months ended June 30, 2023, compared to the three and six months ended June 30, 2022:



Three Months Ended June 30,


Six Months Ended June 30,




2023


2022


2023


2022


LTV to CAC (3)


4.0x


1.8x


3.7x


2.7x




(3)

Refer to the "Key Financial and Operating Data" section below.

 

As of June 30, 2023, the number of active subscriptions on Thorne.com grew 60.2% to 163,374, compared to 101,976 as of June 30, 2022. Information on our subscriptions on Amazon.com as of June 30, 2023 was not made available on the Amazon.com platform due to certain technical challenges with its data reporting. Refer to the "Key Financial and Operating Data" section below for further detail regarding key financial and operating metrics.

Cost of Sales and Gross Profit

The following tables provide a summary of cost of sales and gross profit for the three and six months ended June 30, 2023, compared to the three and six months ended June 30, 2022:



Three Months Ended June 30,




Amounts



Year-Over-Year



As % of Net Sales




2023



2022



$ Change



% Change



2023



2022


(dollars in thousands)



















Net sales


$

72,715



$

54,641



$

18,074




33.1

%



100.0

%



100.0

%

Cost of sales



32,077




24,704




7,373




29.8

%



44.1

%



45.2

%

Gross profit


$

40,638



$

29,937



$

10,701




35.7

%



55.9

%



54.8

%






















Six Months Ended June 30,




Amounts



Year-Over-Year



As % of Net Sales




2023



2022



$ Change



% Change



2023



2022


(dollars in thousands)



















Net sales


$

137,952



$

108,671



$

29,281




26.9

%



100.0

%



100.0

%

Cost of sales



63,041




49,255




13,786




28.0

%



45.7

%



45.3

%

Gross profit


$

74,911



$

59,416



$

15,495




26.1

%



54.3

%



54.7

%

 

For the three and six months ended June 30, 2023, the increase in gross profit as a percentage of net sales was primarily from (i) increase in net sales and (ii) lower overhead costs. These increases were partially offset by certain higher cost of raw material as we sell through our higher priced inventory.

Operating Expenses

The following tables provide a summary of selected operating expenses for the three and six months ended June 30, 2023, compared to the three and six months ended June 30, 2022:



Three Months Ended June 30,




Amounts



Year-Over-Year



As % of Net Sales




2023



2022



$ Change



% Change



2023



2022


(dollars in thousands)



















Research and development


$

1,506



$

1,744



$

(238)




-13.6

%



2.1

%



3.2

%

Marketing



10,038




15,841




(5,803)




-36.6

%



13.8

%



29.0

%

Selling, general and administrative



22,471




18,505




3,966




21.4

%



30.9

%



33.9

%






















Six Months Ended June 30,




Amounts



Year-Over-Year



As % of Net Sales




2023



2022



$ Change



% Change



2023



2022


(dollars in thousands)



















Research and development


$

3,278



$

3,711



$

(433)




-11.7

%



2.4

%



3.4

%

Marketing



18,976




20,642




(1,666)




-8.1

%



13.8

%



19.0

%

Selling, general and administrative



46,048




36,433




9,615




26.4

%



33.4

%



33.5

%

 

The decrease in marketing and marketing expense for three and six months ended June 30, 2023 was in line with planned spending targets, ahead of a significant marketing campaign that started in late July, which is intended to increase brand awareness and highlight the long-term value of the benefits of Thorne's portfolio of offerings. The increase in selling, general and administrative expenses for three and six months ended June 30, 2023 was primarily due to (i) increased selling costs associated with the increase in net sales and (ii) increased employee compensation costs.

Net Income and Diluted EPS

The following tables provide a summary of net income attributable to Thorne HealthTech, Inc., adjusted EBITDA, adjusted net income (loss), diluted EPS and adjusted diluted EPS for the three and six months ended June 30, 2023, compared to the three and six months ended June 30, 2022:



Three Months Ended June 30,




Amounts



Year-Over-Year




2023



2022



$ Change


(dollars in thousands, except per share amounts)










Net income (loss) attributable to Thorne HealthTech, Inc.


$

4,446



$

(5,591)



$

10,037


Adjusted EBITDA



12,535




(1,336)




13,870


Adjusted net income (loss)



8,048




(2,602)




10,650


Diluted EPS


$

0.08



$

(0.11)



$

0.19


Adjusted diluted EPS


$

0.15



$

(0.05)



$

0.20














Six Months Ended June 30,




Amounts



Year-Over-Year




2023



2022



$ Change


(dollars in thousands, except per share amounts)










Net income (loss) attributable to Thorne HealthTech, Inc.


$

4,044



$

(612)



$

4,655


Adjusted EBITDA



18,655




7,425




11,230


Adjusted net income



11,130




4,048




7,082


Diluted EPS


$

0.08



$

(0.01)



$

0.09


Adjusted diluted EPS


$

0.21



$

0.08



$

0.13


 

Financial Position

As of June 30, 2023, the Company had $17.1 million in unrestricted cash and cash equivalents, $15.2 million of restricted cash associated with our plant expansion, and $15.0 million of debt outstanding, inclusive of $2.9 million attributable to equipment financing and note payable of $0.1 million. In addition, as of June 30, 2023, the Company had $30.1 million of available borrowing capacity on its revolving line of credit, with an option for an additional $15 million subject to agreement by the lender. With the combination of restricted cash, existing equipment financing arrangements and funds from a tenant improvement allowance, the Company does not currently expect additional borrowings under its revolving line of credit in connection with the previously announced ongoing plant expansion, which started in the third quarter of 2022 and is projected to be fully operational by the end of the first quarter of 2024

Financial Guidance

The Company is raising the midpoints of its full-year 2023 guidance ranges for each of net sales and gross profit as a percentage of net sales. The Company is also raising its full-year 2023 guidance range for adjusted EPS based on updating its estimate of applicable statutory rates during the second quarter, as described below. The Company is reaffirming its prior guidance range for adjusted EBITDA. Accordingly, the following table presents the Company's updated full-year 2023 guidance and the corresponding growth rates over full-year 2022 results at the low and high ends of the guidance ranges for each measure:



Updated Full-Year Guidance



Prior Guidance



Low - High


Low - High (Y/Y%)



Low - High

Net sales


$285 million - $290 million


24.6% - 26.8%



$280 million - $290 million

Gross profit as a % of net sales


50% - 52%




49% - 52%

Adjusted EBITDA


$30 million - $32 million


22.4% - 30.6%



$30 million - $32 million

Adjusted diluted EPS


$0.26 - $0.32


(18.8%) - 0%



$0.25 - $0.31

 

The Company's updated full-year guidance assumes the following:

  • Marketing expenses of between 14% and 15% of net sales, an increase from the prior range of between 13% and 15%, with the highest spend expected during the third quarter in connection with the Company's recently launched marketing campaign
  • Adjusted diluted EPS guidance also assumes: (i) depreciation and amortization of approximately 2.5% of net sales, with cost recognition expected to gradually increase during the year from the facility expansion, (ii) interest expense of approximately 1% of sales, (iii) an updated estimated full-year adjusted tax rate of 22.9%, a reduction from the prior estimate of 26% and (iv) diluted weighted-average shares outstanding of 54 million as of December 31, 2023
  • Capital expenditures of between $35 million to $38 million primarily related to our plant expansion

Webcast and Conference Call Details

The Company will host a conference call on Tuesday, August 8, 2023, at 5:00 p.m. (U.S. Eastern Time) to discuss its second quarter 2023 financial results. A live webcast of the call can be accessed by logging onto the investors section of the Thorne HealthTech website at https://investors.thornehealthtech.com. A replay will be available on the same website after the call.

In addition, the conference call can be accessed over the phone by dialing +1 888 300 4150 (U.S. and Canada), or +1 646 970 1530 for international callers, approximately 10 minutes prior to the start time. The access code for the live call is 6156220. An audio replay will be available for 7 days following the call. To access the replay, dial +1 800 770 2030 (U.S. and Canada) or +1 647 362 9199 (International). The access code for the replay is 6156220.

About Thorne HealthTech

Thorne HealthTech is a leader in developing innovative solutions for delivering personalized approaches to health and wellness. As a science-driven wellness company that empowers individuals with the support, education, and solutions they need to achieve healthy aging – living healthier longer – Thorne utilizes testing and data to create improved product efficacy and to deliver personalized solutions to consumers, health professionals, and corporations. Predicated on the power of the individual, Thorne leverages artificial intelligence models to provide insights and personalized data, products, and services that help individuals take a proactive and actionable approach to improve and maintain their health over a lifetime. Thorne is the only supplement manufacturer that collaborates with Mayo Clinic on health and wellness research and content, and is trusted by more than five million customers, 47,000+ health-care professionals, thousands of professional athletes, more than 100 professional sports teams, and multiple U.S. National Teams. For more information, visit Thorne.com.

Forward-Looking Statements

This news release contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts contained in this news release, including, without limitation, statements regarding the conditions of our industry, our future results of operations and financial position, business strategy, development plans, expected research and development costs, regulatory strategy, product and service development, sales and marketing activities, international expansion efforts, timing and likelihood of success, as well as plans and objectives of management for future operations, are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as "guidance," "may," "will," "should," "would," "expect," "plan," "anticipate," "could," "intend," "target," "project," "contemplate," "believe," "estimate," "predict," "potential" or "continue" or the negative of these terms or other similar expressions. Forward-looking statements contained in this news release include, but are not limited to, statements regarding financial guidance, market opportunity, ability to penetrate the market, expanded product offerings and expectations for growth. We have based these forward-looking statements largely on our current expectations and projections about our business, the industry in which we operate and financial trends that we believe may affect our business, financial condition, results of operations and prospects, and these forward-looking statements are not guarantees of future performance or development. These forward-looking statements are current only as of the date of this news release and are subject to a number of risks, uncertainties and assumptions described in the section titled "Risk Factors" and elsewhere in Thorne HealthTech's filings made with the Securities and Exchange Commission, including our Annual Report on Form 10-K filed on March 31, 2023 and Quarterly Report on Form 10-Q, which we plan to file on or about August 9, 2023, and other SEC filings, copies of which are available free of charge on the SEC website at www.sec.gov. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events or otherwise.

Key Financial and Operating Data

Amounts reported in thousands within this press release are computed based on the amounts in whole dollars. As a result, the sum of the components reported in thousands may not equal the amounts reported in whole dollars due to rounding. Percentage changes  presented are calculated from the underlying numbers in whole dollars.

To provide investors with additional information regarding its financial results, the Company has provided certain key financial and operating data metrics in this press release, including annual life-time value ("LTV"), customer acquisition costs ("CAC"), LTV to CAC ratio and number of subscriptions.

We define annual LTV to CAC ratio as LTV from a specific calendar year divided by the CAC of that same year. Annual LTV is defined as the average gross contribution per customer purchasing product on Thorne.com and on Amazon.com via our authorized reseller ("DTC Customer") within a particular calendar year divided by one less the customer retention rate ("Churn Rate") during the same period. Average gross contribution is defined as the cumulative revenue from our DTC Customers during a calendar year less the cost of goods divided by the number of purchasing DTC Customers in the same period. To arrive at the annual LTV for a particular calendar year, we divide the average gross contribution by that year's Churn Rate. Annual CAC is defined as the total advertising and marketing expenses, inclusive of cooperative advertising costs treated as a reduction of net sales, less headcount and associated benefit expenses as well as costs attributed to value-in-kind, product samples, and sponsorships for professional and B2B customers, divided by the number of DTC Customers who placed their first order during that same calendar year. We view the annual LTV to CAC ratio as a key indicator for marketing efficiency.

The Company defines subscriptions as orders resulting from DTC Customers opting into automatic refills or orders that are recurring on Thorne.com and Amazon.com. Subscription programs on both platforms offer automatic ordering, payment and delivery of the products to a customer's doorstep.

Non-GAAP Financial Measures

To provide investors with additional information regarding its financial results, the Company has provided certain financial measures that are not recognized under U.S. generally accepted accounting principles ("GAAP") in this press release, including: earnings or loss before interest, taxes, depreciation and amortization ("EBITDA"), EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss) and adjusted diluted earnings (loss) per share.

The Company calculates EBITDA, a non-GAAP financial measure, as net income or loss excluding depreciation and amortization, interest expense, net and income taxes. EBITDA margin represents EBITDA as a percentage of net sales. The Company calculates adjusted EBITDA, a non-GAAP financial measure, by further excluding non-cash items for stock-based compensation expenses, non-cash lease expense, change in fair value of warrant liability, loss on Drawbridge step acquisition, loss on Drawbridge Transaction, guarantee fees, income or loss from equity interests in unconsolidated affiliates and transaction-related costs. Adjusted EBITDA margin represents Adjusted EBITDA as a percentage of net sales. The Company calculates adjusted net income or loss, a non-GAAP financial measure, as net income or loss excluding (i) stock-based compensation expenses, non-cash lease expense, change in fair value of warrant liability, income or loss from equity in unconsolidated affiliates, and transaction-related costs and (ii) utilizing an adjusted provision for income taxes based on the Company's estimate of applicable statutory rates.

EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income (loss) and adjusted diluted earnings (loss) per share should be viewed as measures of operating performance that are supplements to, and not substitutes for, operating income or loss, net income or loss and other GAAP measures of income and loss. The Company has included EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income or loss and adjusted diluted earnings (loss) per share in this press release because they are key measures used by the Company's management to evaluate and compare the Company's financial and operational performance over multiple periods, identifying trends affecting the Company's business, formulating business plans and making strategic decisions. In particular, the exclusion of certain expenses or income in calculating adjusted EBITDA and adjusted net income (loss) facilitates operating performance comparability across reporting periods by removing the effect of non-cash expenses and certain non-recurring variable charges. In addition, the Company believes that providing each of EBITDA and adjusted EBITDA and adjusted net income or loss, together with a reconciliation of net income or loss to each such measure, helps investors make comparisons between Thorne HealthTech and other companies that may have different capital structures, different tax rates and different forms of employee compensation. Each of EBITDA, EBITDA margin, adjusted EBITDA, adjusted EBITDA margin, adjusted net income or loss and adjusted diluted earnings (loss) per share has inherent limitations because of the excluded items, and may not be directly comparable to similarly titled metrics used by other companies.

The Company has not reconciled the forward-looking adjusted EBITDA and adjusted diluted EPS guidance included in this press release to the most directly comparable GAAP measures because this cannot be done without unreasonable effort due to the variability and low visibility with respect to certain costs, the most significant of which are incentive compensation (including stock-based compensation), certain fair value measurements, transaction-related costs and integration, tax items and others that may arise during the year, each of which are potential adjustments to future earnings. The Company expects the variability of these items to have a potentially unpredictable, and a potentially significant, impact on our future GAAP financial results.

 

Thorne HealthTech, Inc.        

Condensed Consolidated Balance Sheets

 (unaudited)




June 30,



December 31,




2023



2022


Assets







Current Assets







Cash and cash equivalents


$

17,093,556



$

36,024,847


Restricted cash



15,201,129




4,900,000


Accounts receivable, net



25,406,854




14,367,785


Related party receivables



159,528




68,731


Inventories, net



71,685,307




58,643,928


Prepaid expenses and other current assets



5,919,447




2,615,593


Total current assets



135,465,821




116,620,884









Long-term Assets







Property and equipment, net



65,324,802




49,176,844


Operating lease right-of-use assets, net



33,588,576




17,546,240


Finance lease right-of-use assets, net



2,734,096




3,143,592


Intangible assets, net



14,887,063




11,830,249


Goodwill



20,041,040




20,041,040


Investments



1,400,000




1,400,000


Equity-method investments



981,726




942,501


Other related party receivables






153,556


Deferred tax assets



6,942,187




7,782,187


Other assets



1,162,138




1,166,928


Total assets


$

282,527,449



$

229,804,021


 

Thorne HealthTech, Inc.

Condensed Consolidated Balance Sheets

 (unaudited)




June 30,



December 31,




2023



2022


Liabilities, Convertible Preferred Stock and Stockholders' Equity







Current Liabilities







Accounts payable


$

40,556,301



$

26,997,203


Accrued payroll



4,333,786




3,508,583


Other accrued liabilities



5,795,887




3,563,843


Related party payable



443,670




988,778


Current portion of operating lease liabilities



2,491,641




1,504,433


Current portion of finance lease liabilities



1,742,661




1,660,404


Notes payable



116,368




814,576


Current portion of long-term debt



764,766




523,510


Total current liabilities



56,245,080




39,561,330


Long-term Liabilities







Revolving line of credit



10,000,000





Operating lease liabilities, net of current portion



44,372,844




28,430,474


Finance lease liabilities, net of current portion



1,125,607




1,455,011


Long-term debt, net of current portion



14,111,906




12,646,049


Warrant liability



1,416,909




1,059,343


Total liabilities



127,272,346




83,152,207









Stockholders' Equity







Common stock; par value $0.01, 200,000,000 shares authorized as of June 30, 2023 and December 31, 2022; 53,920,020 and 53,289,685 issued and outstanding as of June 30, 2023 and December 31, 2022, respectively



543,714




534,875


Treasury stock



(21,950)




(9,678)


Additional paid-in capital



265,697,111




260,978,339


Accumulated deficit



(112,296,636)




(116,483,976)


Accumulated other comprehensive loss



(85,385)




(29,136)


Total stockholders' equity —Thorne HealthTech, Inc.



153,836,854




144,990,424


Non-controlling interests



1,418,249




1,661,390


Total stockholders' equity



155,255,103




146,651,814


Total liabilities and stockholders' equity


$

282,527,449



$

229,804,021


 

Thorne HealthTech, Inc.

Condensed Consolidated Statements of Operations

(unaudited)




Three Months Ended June 30,



Six Months Ended June 30,




2023



2022



2023



2022


Net sales


$

72,714,600



$

54,640,936



$

137,952,379



$

108,670,636


Cost of sales



32,077,213




24,704,294




63,041,402




49,254,885


Gross profit



40,637,387




29,936,642




74,910,977




59,415,751


Operating expenses:













Research and development



1,506,149




1,743,812




3,278,238




3,711,478


Marketing



10,037,781




15,841,490




18,976,472




20,642,450


Selling, general and administrative



22,470,851




18,504,691




46,048,391




36,433,167


Income (loss) from operations



6,622,606




(6,153,351)




6,607,876




(1,371,344)


Other (expense) income, net:













Interest expense, net



(583,145)




(31,514)




(978,144)




(61,671)


Change in fair value of warrant liability



(19,210)




594,899




(357,566)




528,980


Other income (expense), net



236,787




(13,761)




571,318




44,094


Total other (expense) income, net



(365,568)




549,624




(764,392)




511,403


Income (loss) before income taxes and gain from equity interests in unconsolidated affiliates



6,257,038




(5,603,727)




5,843,484




(859,941)


Income tax expense



2,124,000




174,553




2,153,000




207,098


Net income (loss) before gain from equity interests in unconsolidated affiliates



4,133,038




(5,778,280)




3,690,484




(1,067,039)


Gain from equity interests in unconsolidated affiliates



198,964




11,037




110,030




11,037


Net income (loss)



4,332,002




(5,767,243)




3,800,514




(1,056,002)


Net loss — non-controlling interests



(113,817)




(176,538)




(243,141)




(444,356)


Net income (loss) attributable to Thorne HealthTech, Inc.


$

4,445,819



$

(5,590,705)



$

4,043,655



$

(611,646)















Earnings (loss) per share:













Basic


$

0.08



$

(0.11)



$

0.08



$

(0.01)


Diluted


$

0.08



$

(0.11)



$

0.08



$

(0.01)


Weighted average common shares outstanding:













Basic



53,866,857




52,731,604




53,606,294




52,648,653


Diluted



53,866,857




52,731,604




53,606,294




52,648,653


 

Thorne HealthTech, Inc.

Condensed Consolidated Statements of Cash Flows

(unaudited)




Six Months Ended June 30,




2023



2022


Cash Flows from Operating Activities







Net income (loss)


$

3,800,514



$

(1,056,002)


Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:







Depreciation and amortization



3,250,840




2,865,599


Change in fair value of warrant liability



357,566




(528,980)


Non-cash lease expense



1,719,871




1,852,780


Stock-based compensation



6,621,221




5,151,248


Amortization of debt issuance cost and debt discount



86,362




1,285


Change in allowance for credit losses



5,415




(6,363)


Provision for losses on inventories



266,677




(157,682)


Loss on sale of equipment



27,233





Gain from equity interests in unconsolidated affiliates



(110,029)




(11,037)


Write off of related party receivable



154,696





Other non-cash






(38,628)


Change in operating assets and liabilities







Accounts receivable



(10,900,799)




(5,007,492)


Related party receivables



(91,937)




182,605


Related party payables



(545,108)




(759,905)


Inventories



(13,237,252)




(19,321,200)


Prepaid expenses and other assets



(3,385,426)




1,515,266


Accounts payable and accrued liabilities



19,052,192




9,923,479


Accrued payroll



825,203





Other accrued liabilities



1,164,694





Operating lease liabilities



224,052




(1,612,862)


Net cash provided by (used in) operating activities



9,285,985




(7,007,889)


Cash Flows from Investing Activities







Purchase of property and equipment



(21,048,631)




(2,226,073)


Acquisition of PreCon Health



(4,000,000)





Acquisition of Nutrativa, net of cash acquired






(14,862,287)


Purchase of investment in unconsolidated subsidiary






(1,000,000)


Purchase of license agreements



(375,000)




(375,000)


Net cash used in investing activities



(25,423,631)




(18,463,360)


Cash Flows from Financing Activities







Proceeds from Revolving Line of Credit



35,000,000





Proceeds from long-term debt - equipment financing



564,828





Payments on Revolving Line of Credit



(25,000,000)





Payment of long-term debt - equipment financing



(342,673)




(243,475)


Payments of notes payable



(698,208)





Payments on finance lease



(894,332)




(209,514)


Buyback of management stock



(1,227,230)





Debt issuance costs






(25,700)


Proceeds from issuance of ownership interest in consolidated subsidiary






2,601,806


Stock options exercised



161,348




243,943


Net cash provided by financing activities



7,563,733




2,367,060









Effect of exchange rate changes on cash and restricted cash



(56,249)




(186,200)


Net decrease in cash and restricted cash



(8,630,162)




(23,290,389)


Cash, cash equivalents and restricted cash, beginning of period



40,924,847




56,000,915


Cash, cash equivalents and restricted cash, end of period


$

32,294,685



$

32,710,526


 

Thorne HealthTech, Inc.

Reconciliations of Non-GAAP Financial Measures

(unaudited)



Three Months Ended June 30,



Six Months Ended June 30,



2023



2022



2023



2022


Net income (loss) attributable to Thorne HealthTech, Inc.

$

4,445,819



$

(5,590,705)



$

4,043,655



$

(611,646)


 Gain from equity interests in unconsolidated affiliates


(113,817)




(176,538)




(243,141)




(444,356)


 Net income (loss) before gain from equity interests in unconsolidated affiliates

$

4,332,002



$

(5,767,243)



$

3,800,514



$

(1,056,002)














EBITDA and Adjusted EBITDA Reconciliation












Net income (loss)

$

4,332,002



$

(5,767,243)



$

3,800,514



$

(1,056,002)


Net income (loss) margin


6.0

%



(10.6)

%



2.8

%



(1.0)

%

Depreciation and amortization


1,689,821




1,523,749




3,250,840




2,865,599


Interest expense, net


583,145




31,514




978,144




61,671


Income tax expense


2,124,000




174,553




2,153,000




207,098


EBITDA


8,728,968




(4,037,427)




10,182,498




2,078,366


EBITDA margin


12.0

%



(7.4)

%



7.4

%



1.9

%

Adjustments:












Stock-based compensation


2,873,086




3,141,836




6,621,221




5,151,248


Non-cash lease expense


546,459




107,113




1,037,627




216,017


Change in fair value of warrant liability


19,210




(594,899)




357,566




(528,980)


Gain from equity interests in unconsolidated affiliates


(198,964)




(11,037)




(110,030)




(11,037)


Transaction-related costs


566,038




58,825




566,038




519,236


Adjusted EBITDA

$

12,534,797



$

(1,335,589)



$

18,654,920



$

7,424,850


Adjusted EBITDA Margin


17.2

%



(2.4)

%



13.5

%



6.8

%













Adjusted Net Income (Loss) Reconciliation












Net income (loss)


4,332,002




(5,767,243)




3,800,514




(1,056,002)


Income tax expense


2,124,000




174,553




2,153,000




207,098


Stock-based compensation


2,873,086




3,141,836




6,621,221




5,151,248


Non-cash lease expense


546,459




107,113




1,037,627




216,017


Change in fair value of warrant liability


19,210




(594,899)




357,566




(528,980)


Gain from equity interests in unconsolidated affiliates


(198,964)




(11,037)




(110,030)




(11,037)


Transaction-related costs


566,038




58,825




566,038




519,236


Adjusted net income (loss) before adjusted tax expense


10,261,831




(2,890,852)




14,425,936




4,497,580


Adjusted income tax expense (benefit)


2,213,659




(289,085)




3,296,326




449,758


Adjusted net income (loss)

$

8,048,172



$

(2,601,767)



$

11,129,610



$

4,047,822














Diluted weighted-average shares outstanding


53,866,857




52,731,604




53,606,294




52,648,653


Adjusted diluted earnings (loss) per share

$

0.15



$

(0.05)



$

0.21



$

0.08


 

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/thorne-healthtech-reports-second-quarter-2023-results-301896121.html

SOURCE Thorne HealthTech, Inc.

FAQ

What is the ticker symbol for Thorne HealthTech, Inc.?

The ticker symbol for Thorne HealthTech, Inc. is THRN.

What were the net sales for Thorne HealthTech, Inc. in the second quarter of 2023?

Thorne HealthTech, Inc. reported net sales of $72.7 million in the second quarter of 2023, representing a 33.1% increase year-over-year.

What is the adjusted EBITDA for Thorne HealthTech, Inc. in the second quarter of 2023?

Thorne HealthTech, Inc. achieved adjusted EBITDA of $12.5 million in the second quarter of 2023.

What is the CE Mark certification earned by Thorne HealthTech, Inc.?

Thorne HealthTech, Inc. earned CE Mark certification for its at-home blood sampling device in the European Union.

What is the full-year guidance range for net sales provided by Thorne HealthTech, Inc.?

Thorne HealthTech, Inc. raised its full-year guidance range for net sales to $285 million to $290 million.

What is the gross profit as a % of net sales for Thorne HealthTech, Inc. in the second quarter of 2023?

Thorne HealthTech, Inc. achieved a gross profit as a % of net sales of 55.9% in the second quarter of 2023.

Thorne HealthTech, Inc.

NASDAQ:THRN

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