- Net product revenue of $4.6 million increased 26% over the
prior-year quarter
- Wound care sales of $1.3 million mark a record quarterly
high
- Sales and marketing expenses reduced by 16% through optimized
digital marketing programs
- Operating loss decreased by 37% year-over-year
Conference call begins at 4:30 p.m. Eastern
time today
NovaBay® Pharmaceuticals, Inc. (NYSE American: NBY) reports
financial results for the three and six months ended June 30, 2023
and provides a business update.
“Net product revenue reached $4.6 million for the quarter, up
26% from the prior year as we benefited from a particularly strong
quarter in our wound care segment,” said Justin Hall, NovaBay CEO.
“We continue to control expenses by optimizing digital marketing
programs, which led to a 16% year-over-year reduction in sales and
marketing costs. We also reported a significant improvement in
operating loss, which decreased 37% from the prior year.
“Looking ahead we expect growth in our eyecare segment during
the remainder of 2023,” he added. “We are also shifting our
strategy in our skincare segment away from new product development
to focus more on driving sales of our top-selling products through
our most efficient sales channels. This plan streamlines our
business and conserves cash resources.”
Second Quarter Financial Results
Net product revenue for the second quarter of 2023 was $4.6
million, compared with $3.7 million for the prior-year period, and
included $2.2 million of Avenova®-branded eyecare product sales,
$1.1 million of DERMAdoctor® skincare product sales and $1.3
million of NeutroPhase® and PhaseOne® wound care product sales.
Gross margin on net product revenue remained consistent at 50%
for both the second quarters of 2023 and 2022.
Total operating expenses for the second quarter of 2023 were
$3.7 million, an 8% decrease from $4.0 million for the second
quarter of 2022. Sales and marketing expenses for the second
quarter of 2023 were $1.7 million, a 16% decrease from $2.0 million
for the prior year, reflecting lower Avenova digital advertising
costs and lower expenses for outside professional services. General
and administrative (G&A) expenses remained consistent at $1.9
million for both the second quarters of 2023 and 2022. Research
& development (R&D) expenses for the second quarter of 2023
were $27 thousand, versus $40 thousand for the second quarter of
2022.
Net loss attributable to common stockholders for the second
quarter of 2023 was $4.0 million, or $1.27 per share, and included
a $2.0 million non-cash retained earnings reduction related to the
preferred stock down round feature. This compared with a net loss
attributable to common stockholders for the second quarter of 2022
of $2.2 million, or $1.43 per share.
Six Month Financial Results
Net product revenue for the six months ended June 30, 2023 was
$7.7 million, an increase of 11% from $6.9 million for the six
months ended June 30, 2022.
Gross margin on net product revenue for the first half of 2023
increased to 55% from 53% for the first half of 2022.
For the six months ended June 30, 2023, sales and marketing
expenses decreased 16% and G&A expenses declined modestly, both
compared with the six months ended June 30, 2022. R&D expenses
were $53 thousand for the first half of 2023, versus $68 thousand
for the prior-year period.
Net loss attributable to common stockholders for the first half
of 2023 increased to $5.8 million, or $2.21 per share. This
compares with a net loss for the first half of 2022 of $2.3
million, or $1.54 per share.
NovaBay had cash and cash equivalents of $4.4 million as of June
30, 2023, compared with $5.4 million as of December 31, 2022. In
April 2023, the Company completed a private placement of
convertible debentures and warrants for aggregate gross proceeds of
$3.0 million.
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 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.
Stockholders 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 here and will be
archived for 90 days. A replay of the call will be available
beginning two hours after the call ends through August 31, 2023 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 Canada, and entering the
conference identification number 8198065.
About NovaBay Pharmaceuticals, Inc.:
NovaBay Pharmaceuticals, Inc. develops and sells scientifically
created and clinically proven eyecare, skincare and wound care
products. NovaBay’s leading product, Avenova® Antimicrobial Lid
& Lash Solution, is proven in laboratory testing to have broad
antimicrobial properties as it removes foreign material including
microorganisms and debris from the skin around the eye, including
the eyelid. Avenova Antimicrobial Lid & Lash Solution is
available direct to consumer primarily through online distribution
channels such as Amazon, and is also available by prescription and
dispensed by eyecare professionals for blepharitis and dry-eye
disease. DERMAdoctor® offers more than 30 dermatologist-developed
skincare products through the DERMAdoctor website, well-known
traditional and digital beauty retailers, and international
distributors. NovaBay also manufactures and sells effective, yet
gentle and non-irritating wound care products. The PhaseOne® brand
is distributed through commercial partners in the U.S. for
professional use only, and the NeutroPhase® brand is distributed in
China by Pioneer Pharma (Hong Kong) Company Ltd.
Forward-Looking Statements
This release contains information about management's view of the
Company's future expectations, plans and prospects that constitute
forward-looking statements within the meaning of the “safe harbor”
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by the fact that they
do not relate strictly to historic or current facts. Such
forward-looking statements 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, commercial progress, current and
potential future product offerings, the continuing integration of
DERMAdoctor, expanded access to our products, and any future
revenue, and the timing of such revenue, that may result from
selling these products, as well as generally the Company’s expected
future financial results. These statements involve 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 these 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
(and further related impairments to goodwill and intangible
assets), the size of the potential market for our products, the
Company’s products not being able to penetrate one or more targeted
markets and the Company’s ability to continue as a going concern
and revenues (or the execution on capital raise opportunities) not
being 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/Q filings 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 Like us on Facebook Follow us on
Twitter Connect with NovaBay on 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)
June 30,
December 31,
2023
2022
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
4,414
$
5,362
Accounts receivable, net of allowance for
credit losses ($3 and $19 at June 30, 2023 and December 31, 2022,
respectively)
2,623
1,973
Inventory, net of allowance for excess and
obsolete inventory and lower of cost or estimated net realizable
value adjustments ($446 and $499 at June 30, 2023 and December 31,
2022, respectively)
3,660
3,437
Prepaid expenses and other current
assets
519
560
Total current assets
11,216
11,332
Operating lease right-of-use assets
1,636
1,831
Property and equipment, net
108
119
Goodwill
348
348
Other intangible assets, net
2,204
2,280
Other assets
496
489
TOTAL ASSETS
$
16,008
$
16,399
LIABILITIES AND STOCKHOLDERS’
EQUITY
Liabilities:
Current liabilities:
Accounts payable
$
1,481
$
1,080
Accrued liabilities
2,755
2,724
Convertible notes, net
1,185
—
Embedded derivative liability
169
—
Operating lease liabilities
476
453
Total current liabilities
6,066
4,257
Operating lease
liabilities-non-current
1,379
1,588
Total liabilities
7,445
5,845
Commitments & contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value; 5,000
shares authorized;
Series B Preferred Stock; 9 and 12 shares
issued and outstanding at June 30, 2023 and December 31, 2022,
respectively
449
570
Series C Preferred Stock; 1 and 2 shares
issued and outstanding at June 30, 2023 and December 31, 2022,
respectively
1,675
2,403
Common stock, $0.01 par value; 150,000
shares authorized, 4,214 and 2,035 shares issued and outstanding at
June 30, 2023 and December 31, 2022, respectively
673
652
Additional paid-in capital
169,689
165,081
Accumulated deficit
(163,923
)
(158,152
)
Total stockholders’ equity
8,563
10,554
TOTAL LIABILITIES AND STOCKHOLDERS’
EQUITY
$
16,008
$
16,399
NOVABAY PHARMACEUTICALS,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per
share data)
Three Months Ended
June 30,
Six Months Ended
June 30,
2023
2022
2023
2022
Sales:
Product revenue, net
$
4,599
$
3,660
$
7,716
$
6,927
Other revenue, net
11
2
18
8
Total sales, net
4,610
3,662
7,734
6,935
Product cost of goods sold
2,304
1,824
3,492
3,283
Gross profit
2,306
1,838
4,242
3,652
Operating expenses:
Research and development
27
40
53
68
Sales and marketing
1,718
2,040
3,371
4,025
General and administrative
1,916
1,910
3,907
4,093
Total operating expenses
3,661
3,990
7,331
8,186
Operating loss
(1,355
)
(2,152
)
(3,089
)
(4,534)
Non-cash gain on changes in fair value of
warrant liability
216
—
216
2,056
Non-cash gain on changes in fair value of
combined derivative liability
40
—
40
—
Non-cash gain on changes in fair value of
contingent liability
—
—
—
219
Other expense, net
(937
)
(3)
(942
)
(7)
Net loss
(2,036
)
(2,155
)
(3,775
)
(2,266)
Less: Retained earnings reduction related
to preferred stock down round feature triggered
(1,996
)
—
(1,996
)
—
Net loss attributable to common
stockholders
$
(4,032
)
$
(2,155
)
$
(5,771
)
$
(2,266)
Net loss per share attributable to common
stockholders (basic and diluted)
$
(1.27
)
$
(1.43
)
$
(2.21
)
$
(1.54)
Weighted-average shares of common stock
outstanding used in computing net loss per share of common stock
(basic and diluted)
3,176
1,507
2,609
1,469
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230810046583/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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