Total net sales of $22.7 million, up 12%
year-over-year, gross margin of 60.2%, lower operating expenses,
resulting in approximately breakeven net loss and positive Adjusted
EBITDA of $1.6 million for the three months ended June 30,
2024.
ChromaDex Corp. (NASDAQ:CDXC) today announced financial results
for the second quarter of 2024.
Second Quarter 2024 Financial and Recent Operational
Highlights
- Total net sales were $22.7 million, with $18.6 million from Tru
Niagen®, up 12%, and 10%, respectively, from the prior year
quarter.
- Solid gross margin of 60.2% and a $0.7 million reduction in
total operating expenses from the prior year quarter.
- Net loss and loss per share were approximately breakeven, a
$2.2 million and $0.03 per share improvement from the prior year
quarter.
- Adjusted EBITDA, a non-GAAP measure, improved to $1.6 million
from $0.2 million in the prior year quarter.
- In June 2024, ChromaDex announced U.S. FDA Orphan Drug
Designation and Rare Pediatric Disease Designation for nicotinamide
riboside chloride, ChromaDex’s product candidate for the treatment
of Ataxia Telangiectasia (AT). AT is a rare, progressive disease
that typically presents in early childhood and affects the function
of the nervous system, the immune system, and several other body
systems. Plans are underway to file an Investigational New Drug
application with the U.S. FDA in anticipation of conducting human
clinical trials. If the application is approved, ChromaDex will
pursue grant funding or other non-dilutive financing for the human
clinical trials.
- In June 2024, ChromaDex unveiled Niagen+, a product line
featuring pharmaceutical-grade Niagen® (patented nicotinamide
riboside chloride or NRC). U.S. FDA-registered 503B outsourcing
facilities will compound and distribute pharmaceutical-grade
Niagen®, which will be available in intravenous (IV) and injectable
forms exclusively at clinics with prescription. Beginning this
month, Niagen IV and injections will debut at select IV clinics.
Clinical study results(1) support Niagen IV offering a 75% shorter
infusion time, a higher and faster rise in NAD+ blood levels three
hours post-infusion, based on dried blood spot analysis, and is
well-tolerated as compared to the common alternative, NAD+ IV.
- In July 2024, ChromaDex launched Niagen+ NAD+ Test Kits,
available exclusively to healthcare practitioners. The Niagen+ NAD+
Test Kits provide a reliable method for measuring patient blood
NAD+ levels, enabling practitioners to create more personalized and
effective protocols using ChromaDex’s NAD+-boosting products, Tru
Niagen® and Niagen+.
“We delivered solid financial results in the second quarter,
with $22.7 million in revenue and lower operating expenses
resulting in virtually breakeven net loss and operating cash flows,
as well as positive Adjusted EBITDA of $1.6 million,” said
ChromaDex Chief Executive Officer, Rob Fried. “Moreover, we are
thrilled to finally unveil our new product line, Niagen+, for
healthcare practitioners and clinics. This launch marks a
significant milestone for ChromaDex, as we believe we are the first
company to offer NR in both oral and intravenous forms, reinforcing
our position as the global authority in the NAD+ market.”
(1) Source: MedRxiv Randomized, placebo-controlled, pilot
clinical study evaluating acute Niagen®+ IV and NAD+ IV in healthy
adults
Results of operations for the three months ended June 30,
2024 compared to the prior year quarter
ChromaDex recorded net sales of $22.7 million, an increase of
12% or $2.4 million from the prior year quarter. The growth in
total net sales was primarily due to higher Tru Niagen® and Niagen®
ingredient sales.
Gross margin percentage declined 60 basis points to 60.2%
primarily driven by changes in business mix.
Operating expense decreased 5%, or $0.7 million, to $13.9
million driven by lower general and administrative expense,
partially offset by increased investments in sales and marketing
expense.
Net loss and loss per share were approximately breakeven, both
up compared to a net loss of $2.2 million, or $0.03 loss per share,
for the second quarter of 2023. Adjusted EBITDA, a non-GAAP
measure, improved to $1.6 million from $0.2 million in the second
quarter of 2023. See “Reconciliation of Non-GAAP Financial
Measures” for a reconciliation of non-GAAP Adjusted EBITDA to net
loss, the most directly comparable GAAP measure.
Net cash inflow from operating activities was approximately
breakeven for the six months ended June 30, 2024 compared to a net
cash inflow of $6.1 million in the prior year. The approximately
$6.0 million reduction in cash provided by operating activities was
largely driven by a relatively greater increase in trade
receivables of $4.2 million and a greater reduction in accounts
payable of $2.5 million.
2024 Full Year Outlook
Looking forward, for the full year, the Company expects between
10% - 15% revenue growth year-over-year, driven by continued
revenue growth through our e-commerce business as well as
established partnerships, and assumes upside from opportunities
with new partnerships, channels, and products. The Company projects
that gross margin will improve slightly year-over-year. Moreover,
selling and marketing expense will increase in absolute dollars but
remain stable as a percentage of net sales, as the Company
continues to make focused investments to drive brand awareness and
support new market launches, while maintaining efficiency. The
Company plans to continue to invest in research and development to
drive future innovation and expects general and administrative
expense to be down $1.5 million year over year.
Investor Conference Call
A live webcast will be held Wednesday, August 7, 2024 at 4:30
p.m. Eastern time (1:30 p.m. Pacific time) to discuss ChromaDex’s
second-quarter financial results and provide a general business
update.
To listen to the webcast, or to view the earnings press release
and its accompanying financial exhibits, please visit the Investors
Relations section of ChromaDex’s website at
https://investors.chromadex.com. The toll-free dial-in information
for this call is 1-888-596-4144 with Conference ID: 8584242.
The webcast will be recorded, and will be available for replay
via the website from 7:30 p.m. Eastern time on August 7, 2024
through 11:59 p.m. Eastern time on August 14, 2024. The replay of
the call can also be accessed by dialing 800-770-2030, using the
Replay ID: 8584242.
Important Note on Forward Looking Statements:
This 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. Statements that are not
a description of historical facts constitute forward-looking
statements and may often, but not always, be identified by the use
of such words as “expects,” “anticipates,” “intends” “estimates,”
“plans,” “potential,” “possible,” “probable,” “believes” “seeks,”
“may,” “will,” “should,” “could,” “predicts,” “projects,”
“continue,” “would” or the negative of such terms or other similar
expressions. Forward-looking statements include statements
regarding our intentions, beliefs, projections, outlook, analyses
or current expectations concerning, among other things: the
quotation from ChromaDex’s Chief Executive Officer, statements
related to the Company’s 2024 financial outlook including but not
limited to revenue growth, gross margin, expenses, and investment
plans, the statements regarding Niagen IV, statements related to
the Niagen+ NAD+ Test Kit, statements regarding the potential
benefits and development of NRC as a treatment for AT or other
diseases, including statements regarding clinical trials and
obtaining IND Designation from the FDA. Risks that contribute to
the uncertain nature of the forward-looking statements include:
inflationary conditions and adverse economic conditions; our
history of operating losses and need to obtain additional
financing; the growth and profitability of our product sales; our
ability to maintain and grow sales, marketing and distribution
capabilities; changing consumer perceptions of our products; our
reliance on a single or limited number of third-party suppliers;
risks of conducting business in China; including unanticipated
developments in and risks related to the Company’s ability to
secure adequate quantities of pharmaceutical-grade Niagen in a
timely manner; the Company’s ability to obtain appropriate
contracts and arrangements with U.S. FDA-registered 503B
outsourcing facilities required to compound and distribute
pharmaceutical-grade Niagen to clinics; the Company’s ability to
remain on the U.S. FDA Bulk Drug Substances Nominated for Use in
Compounding Under Section 503B of the Federal Food, Drug, and
Cosmetic Act Category 1 list; the Company’s ability to maintain and
enforce the Company’s existing intellectual property and obtain new
patents; the ability to continue to pursue additional studies,
human trials, and to obtain an IND Designation from the FDA;
whether the potential benefits of NRC can be further supported;
further research and development and the results of clinical trials
possibly being unsuccessful or insufficient to meet applicable
regulatory standards or warrant continued development; the ability
to enroll sufficient numbers of subjects in clinical trials;
determinations made by the FDA and other governmental authorities;
and the risks and uncertainties associated with our business and
financial condition in general, described in our filings with the
Securities and Exchange Commission (SEC), including, without
limitation, our most recent Annual Report on Form 10-K and
Quarterly Report on Form 10-Q as filed with the SEC. Readers are
cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof, and actual
results may differ materially from those suggested by these
forward-looking statements. All forward-looking statements are
qualified in their entirety by this cautionary statement and
ChromaDex undertakes no obligation to revise or update this release
to reflect events or circumstances after the date hereof.
About ChromaDex:
ChromaDex Corporation is a global bioscience company dedicated
to healthy aging. The ChromaDex team, which includes world-renowned
scientists, is pioneering research on nicotinamide adenine
dinucleotide (NAD+), an essential coenzyme that is a key regulator
of cellular metabolism and is found in every cell of the human
body. NAD+ levels in humans have been shown to decline with age,
among other factors, and may be increased through supplementation
with NAD+ precursors. ChromaDex is the innovator behind the NAD+
precursor nicotinamide riboside chloride (“NRC” commonly referred
to as “NR”), commercialized as the flagship ingredient Niagen®,
available in both food and pharmaceutical grades. Nicotinamide
riboside chloride and other NAD+ precursors are protected by
ChromaDex’s patent portfolio.
The Company delivers Niagen® as the sole or principal dietary
ingredient in its consumer product line Tru Niagen® available at
www.TruNiagen.com and through partnerships with global retailers
and distributors. The Company also develops and commercializes
proprietary-based ingredient technologies, including food-grade
Niagen® and pharmaceutical-grade Niagen®, and supplies these
ingredients as raw materials to the manufacturers of consumer
products and U.S. FDA-registered 503B outsourcing facilities,
respectively. The Company further offers natural product fine
chemicals, known as phytochemicals, and related research and
development services. Follow us on X (formerly Twitter) @ChromaDex
and Instagram @TruNiagen and subscribe to our latest news via our
website accessible at www.ChromaDex.com to which ChromaDex
regularly posts copies of its press releases as well as additional
updates and financial information about the Company.
ChromaDex Corporation and
Subsidiaries
Unaudited Condensed
Consolidated Statements of Operations
Three Months Ended June
30,
Six Months Ended June
30,
2024
2023
2024
2023
(In thousands, except per share data)
Sales, net
$
22,739
$
20,323
$
44,892
$
42,879
Cost of sales
9,046
7,967
17,743
17,005
Gross profit
13,693
12,356
27,149
25,874
Operating expenses:
Sales and marketing
6,969
6,009
13,709
13,883
Research and development
1,316
1,365
3,411
2,558
General and administrative
5,664
7,298
11,016
13,717
Total operating expenses
13,949
14,672
28,136
30,158
Operating loss
(256
)
(2,316
)
(987
)
(4,284
)
Nonoperating income:
Interest income, net
241
125
480
191
Net loss
$
(15
)
$
(2,191
)
$
(507
)
$
(4,093
)
Basic and diluted loss per share
attributable to common stockholders:
$
0.00
$
(0.03
)
$
(0.01
)
$
(0.05
)
Basic and diluted weighted average common
shares outstanding
75,559
74,967
75,394
74,882
ChromaDex Corporation and
Subsidiaries
Unaudited Condensed
Consolidated Balance Sheets
(In thousands except par values, unless
otherwise indicated)
June 30, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents, including
restricted cash of $152 for both periods presented
$
27,885
$
27,325
Trade receivables, net of allowances of
$85 and $68, respectively; Including receivables from Related Party
of $3.5 million and $2.8 million, respectively
7,818
5,234
Inventories
11,511
14,525
Prepaid expenses and other assets
2,088
2,450
Total current assets
49,302
49,534
Leasehold improvements and equipment,
net
1,841
2,137
Intangible assets, net
435
510
Right-of-use assets
2,063
2,400
Other long-term assets
394
383
Total assets
$
54,035
$
54,964
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable
$
8,105
$
10,232
Accrued expenses
8,621
9,493
Current maturities of operating lease
obligations
973
691
Current maturities of finance lease
obligations
12
11
Customer deposits
156
195
Total current liabilities
17,867
20,622
Deferred revenue
3,311
3,311
Operating lease obligations, less current
maturities
2,133
2,563
Finance lease obligations, less current
maturities
6
12
Total stockholders’ equity
30,718
28,456
Total liabilities and stockholders’
equity
$
54,035
$
54,964
ChromaDex Corporation and
Subsidiaries
Unaudited Condensed
Consolidated Statements of Cash Flows
Six Months Ended June
30,
(In thousands)
2024
2023
Net cash provided by / (used
in):
Operating activities
$
31
$
6,072
Investing activities
(53
)
(96
)
Financing activities
582
(11
)
Net increase in cash and cash
equivalents
560
5,965
Cash and cash equivalents beginning of
period
27,325
20,441
Cash and cash equivalents at end of
period
$
27,885
$
26,406
ChromaDex Corporation and
Subsidiaries
Unaudited Reconciliation of
Non-GAAP Financial Measures
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
(In thousands)
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Q2 2023
Net income (loss), as reported
$
(15
)
$
(492
)
$
114
$
(959
)
$
(2,191
)
Adjustments:
Interest income, net
(241
)
(239
)
(282
)
(188
)
(125
)
Depreciation
170
178
177
233
232
Amortization of intangibles
37
38
39
39
39
Amortization of right of use assets
163
174
157
176
173
Share-based compensation
1,185
984
1,037
1,117
1,324
Severance and restructuring
276
27
5
86
766
Adjusted EBITDA
$
1,575
$
670
$
1,247
$
504
$
218
Non-GAAP Financial Information:
To supplement ChromaDex’s unaudited financial data presented in
accordance with generally accepted accounting principles (GAAP),
the Company has presented Adjusted EBITDA, a non-GAAP financial
measure. ChromaDex believes the presentation of this non-GAAP
financial measure provides important supplemental information to
management and investors and enhances the overall understanding of
the Company’s historical and current financial operating
performance. The Company believes disclosure of the non-GAAP
financial measure has substance because the excluded expenses are
infrequent in nature, are variable in nature or do not represent
current cash expenditures. Further, such non-GAAP financial measure
is among the indicators the Company uses as a basis for evaluating
the Company’s financial performance as well as for planning and
forecasting purposes. Accordingly, disclosure of this non-GAAP
financial measure provides investors with the same information that
management uses to understand the Company’s economic performance
year-over-year.
Adjusted EBITDA is defined as net income (loss) before (a)
interest, (b) depreciation, (c) amortization, (d) non-cash
share-based compensation costs and (e) severance and restructuring
expense. While ChromaDex believes that this non-GAAP financial
measure provides useful supplemental information to investors,
there are limitations associated with the use of such measure. This
measure is not prepared in accordance with GAAP and may not be
directly comparable to similarly titled measures of other companies
due to potential differences in the method of calculation.
Management compensates for these limitations by relying primarily
on the Company’s GAAP results and by using Adjusted EBITDA only
supplementally and by reviewing the reconciliation of the non-GAAP
financial measure to its most comparable GAAP financial
measure.
Non-GAAP financial measures are not prepared in accordance with,
or an alternative for, generally accepted accounting principles in
the United States. The Company’s non-GAAP financial measure is not
meant to be considered in isolation or as a substitute for
comparable GAAP financial measures and should be read only in
conjunction with the Company’s consolidated financial statements
prepared in accordance with GAAP.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240807582330/en/
Investor Relations Ben Shamsian Lytham Partners +1 (646)
829-9701 Shamsian@LythamPartners.com
Media Relations Kendall Knysch Director of Media
Relations +1 (310) 388-6706 Ext. 689
Kendall.Knysch@ChromaDex.com
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