- Avenova® Spray unit sales increased 15% with record-high units
sold through the OTC channel
- Announced launch of two next-generation OTC DERMAdoctor
products this week building on momentum of top-selling collections,
bringing new OTC product introductions to five since the beginning
of 2022
- Increased total sales by 46% by executing on growth strategy
including the DERMAdoctor acquisition to build on established
presence in the eyecare and skincare markets
- Benefitted from operational synergies through consolidated
warehouse operations
Conference call begins at 4:30 p.m. Eastern
time today
NovaBay® Pharmaceuticals, Inc. (NYSE American: NBY) reports
financial results for the three months ended March 31, 2022 and
provides a business update. Financial results for the first quarter
of 2022 include the operations of the DERMAdoctor business, which
was acquired on November 5, 2021.
“Total sales grew 46% during the first quarter and Avenova Spray
unit sales increased 15% with record-high unit sales through the
over-the-counter (OTC) channel,” said Justin Hall, NovaBay CEO.
“With the DERMAdoctor acquisition, we have successfully diversified
our product portfolio and established a strong presence in both the
large and growing eyecare and skincare markets as a foundation for
continued topline growth. We also are benefitting from consolidated
warehouse operations, which provides us greater control over
product fulfillment and our supply chain.
“We are focused on growth by introducing uniquely formulated,
highly effective products, expanding into new markets with existing
products and investing in our consumer marketing. Early this week,
we announced the launch of two new DERMAdoctor OTC products
expanding our Kakadu C and Calm Cool + Corrected collections. These
next-generation products feature breakthrough skincare science and
reflect the depth of our expertise in innovative product creation
as we build on the momentum of our popular skincare families,” he
added. “As we execute on our strategy throughout the year, we
expect the majority of 2022 topline growth to come in the second
half of this year.”
First Quarter Financial Results
Net product revenue for the first quarter of 2022 was $2.6
million, an increase of 46% from $1.8 million for the prior-year
period, and included $0.9 million of DERMAdoctor product sales.
Avenova Spray sales for the first quarter of 2022 were $1.4
million, compared with $1.6 million for the first quarter of 2021,
with the decrease due to an unanticipated return of expired Avenova
Spray units purchased by retail pharmacy distributors in 2019 and
2020. Although the possibility of additional future returns
remains, our overall exposure has declined over time as the higher
volumes of inventory purchased prior to the launch of our OTC
product and the COVID-19 pandemic become no longer subject to
return. The return in the retail pharmacy channel was partially
offset by a 15% increase in the number of Avenova Spray units sold
in the first quarter of 2022, reflecting an increase in OTC and
physician-dispensed units.
Gross margin on net product revenue for the first quarter of
2022 was 58%, compared with 75% for the first quarter of 2021, with
the decrease primarily due to the unanticipated increase in product
returns.
Operating expenses for the first quarter of 2022 were $3.9
million, compared with $2.9 million for the first quarter of 2021,
and included $0.7 million in DERMAdoctor operating expenses. Sales
and marketing expenses remained unchanged at $1.7 million for the
first quarters of 2022 and 2021. The first quarter of 2022 included
$0.4 million of sales and marketing costs incurred for DERMAdoctor
sales, which were partially offset by a lower number of field sales
representatives employed in the 2022 period. General and
administrative (G&A) expenses for the first quarter of 2022
were $2.2 million, compared with $1.2 million for the first quarter
of 2021, and included $0.2 million in DERMAdoctor G&A costs,
one-time costs associated with a special meeting of stockholders
and higher compensation costs. With the majority of the integration
costs behind us, we anticipate our ongoing recurring G&A
expenses to decrease.
Research and development (R&D) expenses for the first
quarter of 2022 were $28 thousand, compared with $5 thousand for
the prior-year period.
Unrealized gain on changes in fair value of warrant liability
for the first quarter of 2022 was $2.1 million. There was no
comparable gain or loss in the prior-year period.
Net loss attributable to common stockholders for the first
quarter of 2022 was $111 thousand, or $0.00 per share, compared
with net loss attributable to common stockholders for the first
quarter of 2021 of $1.5 million, or $0.04 per share.
NovaBay had cash and cash equivalents of $5.6 million as of
March 31, 2022, compared with $7.5 million as of December 31,
2021.
Conference Call
NovaBay management will host an investment community conference
call today beginning at 4:30 p.m. Eastern time (1:30 p.m. Pacific
time) to discuss the Company’s financial and operational results
and to answer questions. Participants can pre-register for the
conference call here. Callers who pre-register will be given a
conference passcode and unique PIN to gain immediate access to the
call and bypass the live operator. Participants may pre-register at
any time, including up to and after the call start time.
Shareholders and other interested parties may also participate
in the conference call by dialing 866-777-2509 from within the U.S.
or 412-317-5413 from outside the U.S., and requesting the NovaBay
Pharmaceuticals call.
A live webcast of the call will be available at
http://novabay.com/investors/events and will be archived for 90
days. A replay of the call will be available beginning two hours
after the call ends through June 2, 2022 by dialing 877-344-7529
from within the U.S., 855-669-9658 from Canada or 412-317-0088 from
outside the U.S., and entering the conference identification number
9711049.
About NovaBay Pharmaceuticals, Inc:
NovaBay Pharmaceuticals, Inc. is a pharmaceutical company that
develops and sells scientifically created and clinically proven
consumer products for the eyecare and skincare markets. Avenova® is
the most prescribed antimicrobial lid and lash spray in the eyecare
market. In November 2021, NovaBay acquired DERMAdoctor, LLC, a
company offering more than 30 dermatologist-developed skincare
products sold through traditional domestic retailers, digital
beauty channels and international distributors.
Forward-Looking Statements
Except for historical information herein, matters set forth in
this press release are forward-looking within the meaning of the
“safe harbor” provisions of the Private Securities Litigation
Reform Act of 1995, including statements about the commercial
progress, the transaction in which the Company acquired DERMAdoctor
and the future integration and performance of DERMAdoctor,
potential opportunities for revenue accretion and future financial
performance of NovaBay. This release contains forward-looking
statements that are based upon management’s current expectations,
assumptions, estimates, projections and beliefs. These statements
include, but are not limited to, statements regarding our business
strategies and current product offerings, potential future product
offerings including through strategic acquisitions, such as the
acquisition of DERMAdoctor, or licensing opportunities, expanded
access to our products, and any future revenue that may result from
selling these products, as well as generally the Company’s expected
future financial results. These statements involve known and
unknown risks, uncertainties and other factors that may cause
actual results or achievements to be materially different and
adverse from those expressed in or implied by the forward-looking
statements. Factors that might cause or contribute to such
differences include, but are not limited to, risks and
uncertainties relating to the integration of DERMAdoctor’s business
with the Company’s business, the size of the potential market for
our products, the possibility that the available market for the
Company’s products will not be as large as expected, the Company’s
products will not be able to penetrate one or more targeted
markets, and revenues will not be sufficient to meet the Company’s
cash needs. Other risks relating to NovaBay’s business, including
risks that could cause results to differ materially from those
projected in the forward-looking statements in this press release,
are detailed in NovaBay’s latest Form 10-K filed with the
Securities and Exchange Commission, especially under the heading
“Risk Factors.” The forward-looking statements in this release
speak only as of this date, and NovaBay disclaims any intent or
obligation to revise or update publicly any forward-looking
statement except as required by law.
Socialize and Stay Informed on
NovaBay’s
Progress
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LinkedIn Visit NovaBay’s Website
Avenova Purchasing
Information
For NovaBay Avenova purchasing information: Please call
800-890-0329 or email sales@avenova.com Avenova.com
DERMAdoctor Purchasing
Information For DERMAdoctor purchasing information:
Please call 877-337-6237 or email service@dermadoctor.com
DERMAdoctor.com
NOVABAY PHARMACEUTICALS,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands except par value
amounts)
March 31,
December 31,
2022
2021
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
5,641
$
7,504
Accounts receivable, net of allowance for
doubtful accounts ($0 at March 31, 2022 and December 31, 2021)
2,300
1,668
Inventory, net of allowance for excess and
obsolete inventory and lower of cost or estimated net realizable
value adjustments ($522 and $641 at March 31, 2022 and December 31,
2021, respectively)
3,785
3,220
Prepaid expenses and other current
assets
752
778
Total current assets
12,478
13,170
Operating lease right-of-use assets
2,331
411
Property and equipment, net
187
193
Goodwill
4,528
4,528
Other intangible assets, net
5,109
5,200
Other assets
161
476
TOTAL ASSETS
$
24,794
$
23,978
LIABILITIES AND STOCKHOLDERS'
EQUITY
Liabilities:
Current liabilities:
Accounts payable
$
1,556
$
1,045
Accrued liabilities
2,763
2,092
Line of credit
—
105
Operating lease liabilities
465
200
Total current liabilities
4,784
3,442
Operating lease
liabilities-non-current
1,922
246
Warrant liability
—
9,558
Contingent earnout liability
342
561
Total liabilities
7,048
13,807
Stockholders' equity:
Preferred stock, $0.01 par value; 5,000
shares authorized; 13 and 14 issued and outstanding at March 31,
2022 and December 31, 2021, respectively
609
680
Common stock, $0.01 par value; 150,000 and
100,000 shares authorized, 51,419 and 47,766 shares issued and
outstanding at March 31, 2022 and December 31, 2021,
respectively
514
478
Additional paid-in capital
158,621
150,900
Accumulated deficit
(141,998
)
(141,887
)
Total stockholders' equity
17,746
10,171
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
24,794
$
23,978
NOVABAY PHARMACEUTICALS,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(Unaudited)
(in thousands except per share
data)
Three Months Ended March
31,
2022
2021
Sales:
Product revenue, net
$
2,623
$
1,801
Other revenue, net
6
6
Total sales, net
2,629
1,807
Product cost of goods sold
1,113
455
Gross profit
1,516
1,352
Operating expenses:
Research and development
28
5
Sales and marketing
1,687
1,680
General and administrative
2,183
1,187
Total operating expenses
3,898
2,872
Operating loss
(2,382
)
(1,520
)
Unrealized gain on changes in fair value
of warrant liability
2,056
—
Unrealized gain on changes in fair value
of contingent liability
219
—
Other (expense) income, net
(4
)
2
Loss before provision for income taxes
(111
)
(1,518
)
Provision for income taxes
—
—
Net loss and comprehensive loss
$
(111
)
$
(1,518
)
Net loss per share attributable to common
stockholders (basic and diluted)
$
0.00
$
(0.04
)
Weighted-average shares of common stock
used in computing net loss per share attributable to common
stockholders (basic and diluted)
50,088
41,782
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220512005405/en/
NovaBay Contact Justin Hall
Chief Executive Officer and General Counsel 510-899-8800
jhall@novabay.com
Investor Contact LHA
Investor Relations Jody Cain 310-691-7100 jcain@lhai.com
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