ProPhase Labs, Inc. (NASDAQ: PRPH), a next generation biotech,
genomics and diagnostics company, today reported its financial and
operational results for the three months ended March 31, 2023.
Corporate highlights for the three months ended
March 31, 2023, include the following:
-
Advancing key initiatives associated with Linebacker-1 cancer
compound at the world-renowned Dana Farber Cancer Institute with
Harvard University professors/scientists.
-
Conducting vital pre-clinical analysis of Linebacker-1 at Eurofins
and Reprocell.
-
Developing the BE-Smart Esophageal Cancer Test with world-renowned
Key Opinion Leaders at Mayo Institute, Kansas University Medical
Center (KUMC) and Baylor University.
-
Continuing sample acquisition and testing of BE-Smart Test at the
cutting-edge facility at Mprobe.
-
Developing Nebula Genomics with Dr. George Church and Russ B.
Altman, MD, PhD.
-
Growing Nebula Genomics with over 100% revenue growth
year-over-year.
-
Growing Pharmaloz Manufacturing with almost 100% year-over-year
growth.
-
Implemented new $6 million stock repurchase program.
Financial highlights for the three months ended
March 31, 2023, include the following:
- Net revenue of $19.3 million for
the three months ended March 31, 2023, as compared to $47.5 million
for the three months ended March 31, 2022.
- Net Income of $0.6 million, or
$0.03 per diluted share, for the three months ended March 31, 2023,
as compared to net income of $12.5 million, or $0.68 per diluted
share, for the three months ended March 31, 2022.
- Adjusted EBITDA of $3.1 million for
the three months ended March 31, 2023, as compared to adjusted
EBITDA of $14.6 million for the three months ended March 31,
2022.
- Cash, cash equivalents and
marketable equity securities of $15.6 million and working capital
of $42.8 million as of March 31, 2023.
Ted Karkus, ProPhase Lab’s Chief Executive
Officer, commented, “I could not be more pleased with our progress
to date. It is a testament to our entire management team that we
generated positive net income and significant adjusted EBITDA even
as our revenue mix transitions away from COVID-19 to whole genome
sequencing and manufacturing and while developing cancer
therapeutic and diagnostic assets each with multi-billion-dollar
potential.
In years past, we turned around and sold the
Cold-EEZE Cold Remedy brand for $50 million. We then took
advantage of the opportunity in COVID-19 testing to build a
world-class high complexity molecular CLIA lab in the State of New
York, and generate enormous revenues, earnings and working capital.
We leveraged these successes to build a first-class infrastructure
and platform. We spent the past two plus years exploring
hundreds of potential acquisitions during the biotech bear market.
We cherry picked what we believe to be the most promising
technologies and are now developing these assets with
multi-billion-dollar potential.
We feel strongly that personalized precision
medicine is the future of medicine. Despite its rapid growth over
the past five years, it is still in its infancy, similar to where
the internet was 20 to 25 years ago. At the heart of this
research is whole genome sequencing. We are working with
world-class advisors and have developed strong relationships with
the global leaders in whole genome sequencing equipment and
consumables. We believe that we are well situated to
potentially be the low-cost provider of whole genome sequencing in
the United States and globally. Our current growth rate at
Nebula Genomics does not reflect the potential distribution in
retail stores in late 2024 and the anticipated launch of our B2B
whole genome sequencing once our lab validations are complete in
the next couple of months. We intend to be the go-to leading
edge genomic processing lab in North America.
We are also developing our Linebacker-1 cancer
compound and achieving impressive pre-clinical results. We
recently shared some of these results from our work with Eurofins
and look forward to updating our shareholders in the near future
with additional results from our pre-clinical studies at Dana
Farber Cancer Institute.
In parallel, we are developing our BE-Smart
Esophageal Cancer Test with world-class organizations. We
anticipate that we will achieve CPT codes and initiate
commercialization and distribution in the U.S. by early 2024.
We feel that the ultimate potential for this much needed, and
potentially life-saving test, is in the billions of dollars.
And while the U.S. is certainly a
multi-billion-dollar market on its own, we believe that Nebula
Genomics, Linebacker and BE-Smart all have massive global potential
as well.
We have successfully completed the build out of
our diversified CLIA lab in New York to provide state-of-the-art
genomics testing as well as a full clinical laboratory
services. We expect all validations for our clinical lab and
genomics testing to be completed within the next couple of
months. We will then leverage our existing infrastructure to
launch our B2B channel for Nebula Genomics and continue to build
our traditional clinical lab business.
Finally, our Pharmaloz Manufacturing business is
operating at full capacity with significant demand to potentially
support $25 million or more in revenues in 2024. We are only
limited by our ability to quickly and efficiently build capacity.
As more and more companies look to outsource their lozenge
production, Pharmaloz will continue to pick up high margin
business. We continue to have strong interest from some of the
largest lozenge brands, both in the U.S. and abroad.
Furthermore, our infrastructure will also allow
us to leverage our relationships with over 40,000 Food, Drug and
Mass (FDM) retail stores in the U.S. as we develop and
commercialize our Equivir broad based anti-viral as a dietary
supplement and introduce our Nebula whole genome sequencing (WGS)
tests in these same stores.
We are all looking forward to a bright future
and plan to provide further updates to our loyal shareholders in
the near term,” concluded Mr. Karkus.
Financial Results
Three Months
Ended March
31, 2023 as compared to
the Three Months Ended March 31, 2022.
For the three months ended March 31, 2023,
net revenue was $19.3 million as compared to $47.5 million for the
three months ended March 31, 2022. The decrease in net revenue
was the result of a $30.4 decrease in net revenue from diagnostic
services, partially offset by a $2.2 million increase in consumer
products. The decrease in net revenue for diagnostic services was
due to decreased COVID-19 testing volumes compared to the 2022
period, which saw a spike in COVID-19 testing as a result of the
Omicron variant, which emerged in early 2022. Overall diagnostic
testing volume decreased from 377,000 tests in the first quarter of
2022 to 120,000 tests in the first quarter of 2023, of which 69.0%
and —% were reimbursed by the HRSA uninsured program, respectively.
The average variable consideration received was $121.03 per
adjudicated test in the first quarter of 2023 compared to $120.14
per adjudicated test in the first quarter of 2022.
Cost of revenues for the three months ended
March 31, 2023 were $8.8 million, comprised of $5.2 million
for diagnostic services and $3.6 million for consumer products.
Cost of revenues for the three months ended March 31, 2022
were $18.9 million, comprised of $16.7 million for diagnostic
services and $2.2 million for consumer products.
We realized a gross profit of $10.5 million for
the three months ended March 31, 2023 as compared to $28.7
million for the three months ended March 31, 2022. The
decrease of $18.2 million was comprised of a decrease of $18.9
million in diagnostic services, partially offset by an increase of
$0.8 million in consumer products. For the three months ended
March 31, 2023 and 2022, we realized an overall gross margin
of 54.5% and 60.3%, respectively. Gross margin for diagnostic
services was 64.0% and 62.8% in the 2023 and 2022 comparable
periods, respectively. The increase in gross margin was principally
due to (i) increased efficiencies in our lab processing, (ii) a
decrease in sample collection costs and (iii) a decrease in cost of
test materials. Gross margin for consumer products was 25.5% and
17.8% in the 2023 and 2022 comparable periods, respectively. Gross
margin for consumer products have historically been influenced by
fluctuations in quarter-to-quarter production volume, fixed
production costs and related overhead absorption, raw ingredient
costs, inventory mark to market write-downs and timing of shipments
to customers.
Diagnostic services costs for the three months
ended March 31, 2023 were $1.2 million compared to $4.7
million for the three months ended March 31, 2022. The
decrease of $3.5 million was due to decreased COVID-19 testing
volumes in 2023 compared to the 2022 period, which saw a spike in
COVID-19 testing as a result of the Omicron variant, which emerged
in late 2021.
General and administration expenses for the
three months ended March 31, 2023 were $8.3 million as
compared to $7.8 million for the three months ended March 31,
2022. The increase of $0.5 million in general and administration
expenses was principally related to an increase in personnel
expenses and professional fees associated with our diagnostic
services business.
Research and development costs for the three
months ended March 31, 2023 were $144,000 as compared to
$35,000 for the three months ended March 31, 2022. The
increase in research and development costs for the three months
ended March 31, 2023 as compared to the three months ended
March 31, 2022 was principally due to increased activities at
ProPhase Biopharma, Inc. (PBIO). These activities include product
research and field testing.
Our aggregate cash and cash equivalents as of
March 31, 2023 were $9.6 million as compared to $9.1
million at December 31, 2022. Our working capital was 42.8
million and $44.8 million as of March 31, 2023 and
December 31, 2022, respectively. The increase of
$0.5 million in our cash and cash equivalents for the three
months ended March 31, 2023 was principally due to the
proceeds from the sale of marketable debt securities of
$1.3 million, proceeds from the issuance of notes payable of
$7.6 million, and $0.5 million cash provided by operating
activities, offset by (i) our acquisition of the world-wide
exclusive rights to the BE-Smart Esophageal Pre-Cancer diagnostic
screening test and related intellectual property assets from Stella
Diagnostics, Inc. for approximately $4.5 million, comprised of
approximately $3.5 million in cash and $1 million in common stock,
(ii) the repurchase of common shares for payment of statutory taxes
due on cashless exercise of options of $5.4 million, and (iii) the
repurchase of common shares for $0.5 million and (iii) capital
expenditures of $0.5 million.
Conference Call and Webcast
DetailsManagement will host a conference call at 11:00 AM
ET, Thursday, May 11, 2023, to provide an update on corporate
developments and review financial results. Following management’s
formal remarks, there will be a question-and-answer session.
Participants can register for the conference call by navigating
to:
https://dpregister.com/sreg/10178710/f95cce1458
Please note that registered participants will
receive their dial-in number upon registration and may dial
directly into the call without delay. Those without internet access
or unable to pre-register may dial in by calling: 1-866-777-2509
(domestic), or 1-412-317-5413 (international). All callers should
dial-in approximately 10 minutes prior to the scheduled start time
and ask to be joined into ProPhase Lab’s call.
The conference call will be broadcast live and
available for replay at
https://event.choruscall.com/mediaframe/webcast.html?webcastid=bQyqnuoI
and via the investor relations section of the Company’s website at
www.ProPhaseLabs.com.
A webcast replay of the call will be available
approximately two hours after the end of the call at the above
links. A telephonic replay of the call will be available and may be
accessed by calling 1-877-344-7529 (domestic) or 1-412-317-0088
(international) and using access code 9261373.
About ProPhase Labs
ProPhase Labs, Inc. (Nasdaq: PRPH) (“ProPhase”)
is a next-generation biotech, genomics and diagnostics company. Our
goal is to create a healthier world with bold action and the power
of insight. We’re revolutionizing healthcare with industry-leading
Whole Genome Sequencing solutions, while developing potential game
changer diagnostics and therapeutics in the fight against cancer.
This includes a potentially life-saving cancer test focused on
early detection of esophageal cancer and potential breakthrough
cancer therapeutics with novel mechanisms of action. Our
world-class CLIA labs and cutting-edge diagnostic technology
provide wellness solutions for healthcare providers and consumers.
We develop, manufacture, and commercialize health and wellness
solutions to enable people to live their best lives. We are
committed to executional excellence, smart diversification, and a
synergistic, omni-channel approach. ProPhase Labs’ valuable
subsidiaries, their synergies, and significant growth underscores
our multi-billion dollar potential.
Forward Looking Statements
Except for the historical information contained
herein, this document contains forward looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding our strategy, plans,
objectives and initiatives, including our plans to grow our
subsidiaries and build a multi-billion dollar company, our
expectations regarding the future revenue growth potential of each
of our subsidiaries, our plans to sell our products in food, drug
and mass (FDM) stores, our expected timeline for commercializing
our BE-Smart Test and its market potential, and the market
potential of Equivir (dietary supplement) and Linebacker-1, , as
well as our plans to become the low-cost provider of and leader in
whole genomic sequencing and to expand our New York lab to include
both traditional clinical testing and genomic sequencing.
Management believes that these forward-looking statements are
reasonable as and when made. However, such forward-looking
statements involve known and unknown risks, uncertainties, and
other factors that may cause actual results to differ materially
from those projected in the forward-looking statements. These risks
and uncertainties include but are not limited to our ability to
obtain and maintain necessary regulatory approvals, general
economic conditions, consumer demand for our products and services,
challenges relating to entering into and growing new business
lines, the competitive environment, and the risk factors listed
from time to time in our Annual Reports on Form 10-K, Quarterly
Reports on Form 10-Q and any other SEC filings. The Company
undertakes no obligation to update forward-looking statements
except as required by applicable securities laws. Readers are
cautioned that forward-looking statements are not guarantees of
future performance and are cautioned not to place undue reliance on
any forward-looking statements.
For more information, visit
www.ProPhaseLabs.com.
ProPhase Media Relations and
Institutional Investor Contact:ProPhase Labs,
Inc.267-880-1111investorrelations@prophaselabs.com
ProPhase Retail Investor Relations
Contact:Renmark Financial CommunicationsJohn
Boidman514-939-3989Jboidman@renmarkfinancial.com
Source: ProPhase Labs, Inc.
ProPhase Labs,
Inc. and
SubsidiariesCondensed Consolidated Balance
Sheets(in
thousands, except share and per share amounts)
|
|
March 31, 2023 |
|
|
December 31, 2022 |
|
|
|
|
(Unaudited) |
|
|
|
|
|
ASSETS |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
9,613 |
|
|
$ |
9,109 |
|
Marketable debt securities, available for sale |
|
|
5,946 |
|
|
|
8,328 |
|
Accounts receivable, net |
|
|
37,836 |
|
|
|
37,054 |
|
Inventory, net |
|
|
4,311 |
|
|
|
3,976 |
|
Prepaid expenses and other current assets |
|
|
3,573 |
|
|
|
2,366 |
|
Total current assets |
|
|
61,279 |
|
|
|
60,833 |
|
|
|
|
|
|
|
|
|
|
Property, plant and equipment, net |
|
|
8,891 |
|
|
|
7,288 |
|
Prepaid expenses, net of current portion |
|
|
121 |
|
|
|
121 |
|
Operating lease right-of-use asset, net |
|
|
3,974 |
|
|
|
4,059 |
|
Intangible assets, net |
|
|
14,524 |
|
|
|
8,475 |
|
Goodwill |
|
|
5,231 |
|
|
|
5,709 |
|
Deferred tax asset |
|
|
191 |
|
|
|
— |
|
Other assets |
|
|
1,163 |
|
|
|
1,163 |
|
TOTAL ASSETS |
|
$ |
95,374 |
|
|
$ |
87,648 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
4,866 |
|
|
$ |
5,905 |
|
Accrued diagnostic services |
|
|
353 |
|
|
|
1,009 |
|
Accrued advertising and other allowances |
|
|
151 |
|
|
|
99 |
|
Operating lease liabilities |
|
|
298 |
|
|
|
301 |
|
Deferred revenue |
|
|
2,841 |
|
|
|
2,499 |
|
Income tax payable |
|
|
3,849 |
|
|
|
4,190 |
|
Other current liabilities |
|
|
6,109 |
|
|
|
2,072 |
|
Total current liabilities |
|
|
18,467 |
|
|
|
16,075 |
|
|
|
|
|
|
|
|
|
|
Non-current liabilities: |
|
|
|
|
|
|
|
|
Deferred revenue, net of current portion |
|
|
1,160 |
|
|
|
1,059 |
|
Deferred tax liability, net |
|
|
— |
|
|
|
224 |
|
Unsecured promissory notes, net of discount of $376 and $0 |
|
|
7,224 |
|
|
|
— |
|
Unsecured convertible promissory notes, net |
|
|
2,400 |
|
|
|
2,400 |
|
Operating lease liabilities, net of current portion |
|
|
4,182 |
|
|
|
4,259 |
|
Due to sellers (see Note 3) |
|
|
2,000 |
|
|
|
— |
|
Total non-current liabilities |
|
|
16,966 |
|
|
|
7,942 |
|
Total liabilities |
|
|
35,433 |
|
|
|
24,017 |
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders’ equity |
|
|
|
|
|
|
|
|
Preferred stock authorized 1,000,000, $0.0005 par value, no shares
issued and outstanding |
|
|
— |
|
|
|
— |
|
Common stock authorized 50,000,000, $0.0005 par value, 16,851,041
and 16,210,776 shares outstanding, respectively |
|
|
17 |
|
|
|
16 |
|
Additional paid-in capital |
|
|
111,482 |
|
|
|
109,138 |
|
Retained earnings |
|
|
12,303 |
|
|
|
11,753 |
|
Treasury stock, at cost, 18,934,955 and 18,126,970 shares,
respectively |
|
|
(63,953 |
) |
|
|
(58,033 |
) |
Accumulated other comprehensive loss |
|
|
92 |
|
|
|
757 |
|
Total stockholders’ equity |
|
|
59,941 |
|
|
|
63,631 |
|
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
$ |
95,374 |
|
|
$ |
87,648 |
|
See accompanying notes to these condensed
consolidated financial statements
ProPhase Labs,
Inc. and
SubsidiariesCondensed Consolidated Statements of
Operations and Comprehensive Income
(Loss)(in
thousands, except per share
amounts)(unaudited)
|
|
For the three months ended |
|
|
|
March 31, 2023 |
|
|
March 31, 2022 |
|
Revenues, net |
|
$ |
19,303 |
|
|
$ |
47,531 |
|
Cost of revenues |
|
|
8,783 |
|
|
|
18,854 |
|
Gross profit |
|
|
10,520 |
|
|
|
28,677 |
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
Diagnostic expenses |
|
|
1,203 |
|
|
|
4,672 |
|
General and administration |
|
|
8,298 |
|
|
|
7,824 |
|
Research and development |
|
|
144 |
|
|
|
35 |
|
Total operating expenses |
|
|
9,645 |
|
|
|
12,531 |
|
Income from operations |
|
|
875 |
|
|
|
16,146 |
|
|
|
|
|
|
|
|
|
|
Interest income, net |
|
|
11 |
|
|
|
73 |
|
Interest expense |
|
|
(215 |
) |
|
|
(233 |
) |
Other income (loss) |
|
|
(107 |
) |
|
|
(76 |
) |
Income from operations before income taxes |
|
|
564 |
|
|
|
15,910 |
|
Income tax expense (benefit) |
|
|
14 |
|
|
|
(3,416 |
) |
Income from operations after income taxes |
|
|
550 |
|
|
|
12,494 |
|
Net income |
|
$ |
550 |
|
|
$ |
12,494 |
|
|
|
|
|
|
|
|
|
|
Other comprehensive (loss) income: |
|
|
|
|
|
|
|
|
Unrealized loss on marketable debt securities |
|
|
(665 |
) |
|
|
37 |
|
Total comprehensive (loss) income |
|
$ |
(115 |
) |
|
$ |
12,531 |
|
|
|
|
|
|
|
|
|
|
Earnings per share: |
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.03 |
|
|
$ |
0.81 |
|
Diluted |
|
$ |
0.03 |
|
|
$ |
0.68 |
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
Basic |
|
|
16,748 |
|
|
|
15,486 |
|
Diluted |
|
|
18,061 |
|
|
|
18,740 |
|
See accompanying notes to these condensed
consolidated financial statements
ProPhase Labs,
Inc. and
SubsidiariesCondensed Consolidated Statements of
Cash Flows(in
thousands)(unaudited)
|
|
For the three months ended |
|
|
|
March 31, 2023 |
|
|
March 31, 2022 |
|
Cash
flows from operating activities |
|
|
|
|
|
|
|
|
Net income |
|
$ |
550 |
|
|
$ |
12,494 |
|
Adjustments
to reconcile net income to net cash provided by operating
activities: |
|
|
|
|
|
|
|
|
Realized loss on marketable debt securities |
|
|
107 |
|
|
|
179 |
|
Depreciation and amortization |
|
|
1,292 |
|
|
|
1,249 |
|
Accretion of debt discount |
|
|
20 |
|
|
|
1 |
|
Amortization on operating lease right-of-use assets |
|
|
85 |
|
|
|
83 |
|
Gain on sale of assets |
|
|
— |
|
|
|
(23 |
) |
Stock-based compensation expense |
|
|
947 |
|
|
|
482 |
|
Change in fair value of investment securities |
|
|
— |
|
|
|
76 |
|
Accounts receivable allowances |
|
|
(147 |
) |
|
|
(924 |
) |
Inventory valuation reserve |
|
|
— |
|
|
|
25 |
|
Bad debt expenses |
|
|
230 |
|
|
|
— |
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(864 |
) |
|
|
1,938 |
|
Inventory |
|
|
(335 |
) |
|
|
(105 |
) |
Prepaid expenses and other current assets |
|
|
(2,107 |
) |
|
|
(126 |
) |
Deferred tax asset |
|
|
(96 |
) |
|
|
— |
|
Other assets |
|
|
— |
|
|
|
360 |
|
Accounts payable and accrued expenses |
|
|
(2,661 |
) |
|
|
1,178 |
|
Accrued diagnostic services |
|
|
(656 |
) |
|
|
(878 |
) |
Accrued advertising and other allowances |
|
|
52 |
|
|
|
— |
|
Deferred revenue |
|
|
443 |
|
|
|
165 |
|
Deferred tax liability |
|
|
— |
|
|
|
443 |
|
Operating lease liabilities |
|
|
(80 |
) |
|
|
(73 |
) |
Income tax payable |
|
|
(341 |
) |
|
|
2,973 |
|
Other current liabilities |
|
|
4,037 |
|
|
|
770 |
|
Net cash
provided by operating activities |
|
|
476 |
|
|
|
20,287 |
|
|
|
|
|
|
|
|
|
|
Cash
flows from investing activities |
|
|
|
|
|
|
|
|
Business
acquisitions, escrow received |
|
|
478 |
|
|
|
— |
|
Asset acquisition, net of cash acquired |
|
|
(2,904 |
) |
|
|
— |
|
Purchase of marketable securities |
|
|
— |
|
|
|
(206 |
) |
Proceeds from sale of marketable debt securities |
|
|
1,291 |
|
|
|
5,300 |
|
Proceeds from dispositions of property and other assets, net |
|
|
— |
|
|
|
85 |
|
Capital expenditures |
|
|
(517 |
) |
|
|
(1,095 |
) |
Net cash
(used in) provided by investing activities |
|
|
(1,652 |
) |
|
|
4,084 |
|
|
|
|
|
|
|
|
|
|
Cash
flows from financing activities |
|
|
|
|
|
|
|
|
Proceeds from issuance of secured note payable |
|
|
7,600 |
|
|
|
— |
|
Repurchase
of common stock for payment of statutory taxes due on cashless
exercise of stock option |
|
|
(5,379 |
) |
|
|
— |
|
Repurchases of common shares |
|
|
(541 |
) |
|
|
(1,150 |
) |
Repayment of
note payable |
|
|
— |
|
|
|
(1,426 |
) |
Payment of dividends |
|
|
— |
|
|
|
(4,646 |
) |
Net cash
provided by (used in) financing activities |
|
|
1,680 |
|
|
|
(7,222 |
) |
|
|
|
|
|
|
|
|
|
Increase in
cash, cash equivalents and restricted cash |
|
|
504 |
|
|
|
17,149 |
|
Cash and
cash equivalents, at the beginning of the period |
|
|
9,109 |
|
|
|
8,658 |
|
Cash and
cash equivalents, at the end of the period |
|
$ |
9,613 |
|
|
$ |
25,807 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures: |
|
|
|
|
|
|
|
|
Cash paid
for income taxes |
|
$ |
1,500 |
|
|
$ |
— |
|
Interest
payment on the promissory notes |
|
$ |
203 |
|
|
$ |
241 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash investing and financing
activities: |
|
|
|
|
|
|
|
|
Financed
capital expenditures |
|
$ |
1,623 |
|
|
$ |
— |
|
Common stock
issued in Asset Acquisition |
|
$ |
1,000 |
|
|
$ |
— |
|
Issuance of
common shares for debt conversion |
|
$ |
— |
|
|
$ |
600 |
|
Net
unrealized loss, investments in marketable debt securities |
|
$ |
— |
|
|
$ |
37 |
|
See accompanying notes to these condensed
consolidated financial statements
Non-GAAP Financial Measure and
Reconciliation(unaudited)
In an effort to provide investors with
additional information regarding our results of operations as
determined by accounting principles generally accepted in the
United States of America (“GAAP”), we disclose certain non-GAAP
financial measures. The primary non-GAAP financial measures we
disclose are EBITDA and Adjusted EBITDA.
We define EBITDA as net income (loss) before net
interest expense, income taxes, depreciation and amortization.
Adjusted EBITDA further adjusts EBITDA by excluding acquisition
costs, other non-cash items, and other unusual or non-recurring
charges (as described in the table below).
Non-GAAP financial measures should not be
considered as a substitute for, or superior to, measures of
financial performance prepared in accordance with GAAP. These
non-GAAP financial measures do not reflect a comprehensive system
of accounting, differ from GAAP measures with the same names and
may differ from non-GAAP financial measures with the same or
similar names that are used by other companies. We compute non-GAAP
financial measures using the same consistent method from quarter to
quarter and year to year. We may consider whether other significant
items that arise in the future should be excluded from the non-GAAP
financial measures.
We use EBITDA and Adjusted EBITDA internally to
evaluate and manage the Company’s operations because we believe
they provide useful supplemental information regarding the
Company’s ongoing economic performance. We believe that these
non-GAAP financial measures provide meaningful supplemental
information regarding our operating results primarily because they
exclude amounts that are not considered part of ongoing operating
results when planning and forecasting and when assessing the
performance of the organization. In addition, we believe that
non-GAAP financial information is used by analysts and others in
the investment community to analyze our historical results and in
providing estimates of future performance and that failure to
report these non-GAAP measures could result in confusion among
analysts and others and create a misplaced perception that our
results have underperformed or exceeded expectations.
The following table sets forth the reconciliations of EBITDA and
Adjusted EBITDA excluding other costs to the most comparable GAAP
financial measures (in thousands):
|
|
For the three months ended |
|
|
|
March 31, 2023 |
|
|
March 31, 2022 |
|
GAAP net income (1) |
|
$ |
550 |
|
|
$ |
12,494 |
|
Interest, net |
|
|
204 |
|
|
|
160 |
|
Income tax expense |
|
|
14 |
|
|
|
— |
|
Depreciation and amortization |
|
|
1,292 |
|
|
|
1,250 |
|
EBITDA |
|
|
2,060 |
|
|
|
13,904 |
|
Share-based compensation expense |
|
|
947 |
|
|
|
482 |
|
Non-cash rent expense (2) |
|
|
6 |
|
|
|
10 |
|
Bad debt expense |
|
|
74 |
|
|
|
250 |
|
Adjusted EBITDA |
|
$ |
3,087 |
|
|
$ |
14,646 |
|
(1) We believe that net income is the financial
measure calculated and presented in accordance with GAAP that is
most directly comparable to EBITDA and Adjusted EBITDA. EBITDA and
Adjusted EBITDA measure the Company’s operating performance without
regard to certain expenses. EBITDA and Adjusted EBITDA are not
presentations made in accordance with GAAP and the Company’s
computation of EBITDA and Adjusted EBITDA may vary from others in
the industry. EBITDA and Adjusted EBITDA have important limitations
as analytical tools and should not be considered in isolation or as
substitutes for analysis of the Company’s results as reported under
GAAP.
(2) The non-cash portion of rent, which reflects
the extent to which our GAAP rent expense recognized exceeds (or is
less than) our cash rent payments. For newer leases, our rent
expense recognized typically exceeds our cash rent payments, while
for more mature leases, rent expense recognized is typically less
than our cash rent payments.
ProPhase Labs (NASDAQ:PRPH)
Historical Stock Chart
From Apr 2024 to May 2024
ProPhase Labs (NASDAQ:PRPH)
Historical Stock Chart
From May 2023 to May 2024