Guardion Health Sciences, Inc. (Nasdaq: GHSI) (“Guardion” or the
“Company”), a clinical nutrition company that offers a portfolio of
science-based, clinically-supported products designed to support
the health needs of consumers, healthcare professionals and
providers and their patients, announced its financial results for
the three months and nine months ended September 30, 2023. The
Company also provided a corporate update to stockholders.
Financial highlights for the three months ended
September 30, 2023 include the following:
- Total revenue was $3,337,190 for
the three months ended September 30, 2023, as compared to
$2,663,550 for the three months ended September 30, 2022, an
increase of $673,640 or 25.3%. The increase in total revenue was
driven primarily by sales growth of the Viactiv®
product line, which accounted for approximately 97.5% and 96.2% of
the Company’s total revenue for the three months ended September
30, 2023 and 2022, respectively. Drivers of the sales increase
included resolution of the short-term impact of a third-party
warehouse expansion which had resulted in carry over of retail
shipments from June into July 2023, in combination with strong
shipments to Amazon, plus additional distribution of the Company’s
Omega Boost® product.
- Gross profit was $1,460,252 for the
three months ended September 30, 2023, as compared to $1,088,184
for the three months ended September 30, 2022, an increase of
$372,068 or 34.2%. The increase in gross profit was primarily
attributable to the increase in sales from the
Viactiv® product line.
- Gross margin for the three months
ended September 30, 2023 was 43.8%, as compared to 40.9% for the
three months ended September 30, 2022, an increase of 2.9
percentage points, which was driven by cost of goods favorability,
such as lower transportation costs, and higher sales in 2023.
- Total operating expenses for the
three months ended September 30, 2023 were $2,233,166, as compared
to $2,827,578 for the three months ended September 30, 2022, a
decrease of $594,412 or 21.0%. The variance was attributable to a
combination of factors, including the amortization of intangible
assets in 2022 that was no longer occurring in 2023, reduced
payroll expense, lower executive stock compensation expense and
lower consultant fees.
- Loss from operations for the three
months ended September 30, 2023 decreased to $(772,914), as
compared to $(1,739,394) for the three months ended September 30,
2022, a reduction of $966,480 or 55.6%.
- As a result of the aforementioned
factors, including the non-cash gain from the change in fair value
of the warrant derivative liability of $1,050,800 and $873,200 for
the three months ended September 30, 2023 and 2022, respectively,
net income was $372,633 for the three months ended September 30,
2023, as compared to a net loss of $822,912 for the three months
ended September 30, 2022.
- Basic and diluted net income for
the three months ended September 30, 2023 was $0.29 per share, as
compared to basic and diluted net loss of $(0.67) per share for the
three months ended September 30, 2022, based on 1,273,486 weighted
average common shares outstanding in 2023 and 1,232,016 weighted
average common shares outstanding in 2022.
- Cash used in operations for the
three months ended September 30, 2023 was $766,581, as compared to
$1,282,141 for the three months ended September 30, 2022.
Financial highlights for the nine months ended
September 30, 2023 include the following:
- Total revenue was $9,312,695 for
the nine months ended September 30, 2023, as compared to $8,323,382
for the nine months ended September 30, 2022, an increase of
$989,313 or 11.9%. The increase in total revenue was driven by
increased sales of the Viactiv® product line,
which accounted for approximately 97.2% and 96.2% of the Company’s
total revenue for the nine months ended September 30, 2023 and
2022, respectively. Drivers of the sales increase included
resolution of the short-term impact of a third-party warehouse
expansion which resulted in carry over of retail shipments from
June into July 2023, in combination with strong shipments to
Amazon, plus additional distribution of the Company’s Omega
Boost® product line.
- Gross profit was $4,044,821 for the
nine months ended September 30, 2023, as compared to $3,584,185 for
the nine months ended September 30, 2022, an increase of $460,636
or 12.9%. The increase in gross profit was primarily attributable
to the increase in sales from the Viactiv® product
line.
- Gross margin for the nine months
ended September 30, 2023 was 43.4%, as compared to 43.1% for the
nine months ended September 30, 2022, an increase of 0.3 percentage
points, which was driven by cost of goods favorability, such as the
realization of lower supply chain transportation costs that began
May 2023, and higher sales.
- Total operating expenses for the
nine months ended September 30, 2023 were $7,294,388, as compared
to $9,655,205 for the nine months ended September 30, 2022, a
decrease of $2,360,817 or 24.5%. The variance was attributable to a
combination of factors, including including the amortization of
intangible assets in 2022, reduced payroll expense, insurance, and
professional fees and consulting fees.
- Loss from operations for the nine
months ended September 30, 2023 decreased to $(3,249,567), as
compared to $(6,071,020) for the nine months ended September 30,
2022, a reduction of $2,821,453 or 46.5%.
- As a result of the aforementioned
factors, including the non-cash gain from the change in fair value
of the warrant derivative liability of $2,693,600 and $3,548,300
for the nine months ended September 30, 2023 and 2022,
respectively, net loss was $266,687 for the nine months ended
September 30, 2023, as compared to a net loss of $2,468,262 for the
nine months ended September 30, 2022.
- Basic and diluted net loss for the
nine months ended September 30, 2023 was $(0.21) per share, as
compared to basic and diluted net loss of $(2.27) per share for the
nine months ended September 30, 2022, based on 1,273,249 weighted
average common shares outstanding in 2023 and 1,083,924 weighted
average common shares outstanding in 2022.
- Cash used in operations for the
nine months ended September 30, 2023 was $3,052,293, as compared to
$6,082,906 for the nine months ended September 30, 2022. The
decrease of $3,030,613 in cash used by operating activities was
primarily due to a reduction in general and administrative
expenses.
- As of September 30, 2023, the
Company had unrestricted cash and cash equivalents of $7,657,309
and net working capital of $11,407,975.
Additional significant events that occurred
during the three months and nine months ended September 30, 2023,
included the following:
- Alantra LLC was retained as the
Company’s exclusive financial advisor to implement a strategic
review to solicit and evaluate alternatives to maximize stockholder
value in the near-term, which review is on-going.
- Jan Hall was appointed President
and CEO, effective June 19, 2023, replacing Bret Scholtes.
- Katie Cox was appointed as Chief
Accounting Officer, effective July 25, 2023, replacing Jeffrey
Benjamin.
Jan Hall, Guardion’s President and Chief
Executive Officer, commented, “We are pleased with the progress
made during the quarter which was driven by strong topline growth
combined with improved operating margins and a reduced cash
burn.”
“We are continuing our efforts to build a
clinical nutrition platform and the Viactiv®
brand. We are also continuing our strategic review process with
Alantra, LLC (“Alantra”), our exclusive financial advisor, to
evaluate opportunities to maximize stockholder value in the
near-term.
“In the meantime, we believe our market
position, consumer loyalty and the extendability of the
Viactiv® brand, combined with our current
operating business strategy, provide us with a viable platform from
which to leverage our resources to continue our efforts to grow
operations, improve financial performance and maximize stockholder
value,” concluded Ms. Hall.”
Financial Results
Additional information with respect to the
Company’s business, operations and financial condition as of and
for the three months and nine months ended September 30, 2023 is
contained in the Company’s Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 2023, which has been filed
with the U.S. Securities and Exchange Commission (the “SEC”) at
www.sec.gov.
About Guardion Health Sciences,
Inc.
Guardion Health Sciences, Inc. (Nasdaq: GHSI) is
a clinical nutrition company that offers a portfolio of
science-based, clinically supported products designed to support
the health needs of consumers, healthcare professionals and
providers and their patients. Information and risk factors with
respect to Guardion and its business may be obtained in the
Company’s filings with the SEC at www.sec.gov.
Forward-Looking Statement
Disclaimer
With the exception of the historical information
contained in this news release, the matters described herein may
contain “forward-looking statements” within the meaning of Section
27A of the Securities Act of 1933, as amended, and Section 21E of
the Securities Exchange Act of 1934, as amended. These
forward-looking statements contain information about our
expectations, beliefs, plans or intentions regarding our product
development and commercialization efforts, research and development
efforts, business, financial condition, results of operations,
strategies or prospects, and other similar matters. Statements
preceded by, followed by or that otherwise include the words
“believes,” “expects,” “anticipates,” “intends,” “projects,”
“estimates,” “plans,” “hopes” and similar expressions or future or
conditional verbs such as “will,” “should,” “would,” “may” and
“could” are generally forward-looking in nature and not historical
facts, although not all forward-looking statements include the
foregoing.
These statements are based on management’s
current expectations and assumptions about future events, which are
inherently subject to uncertainties, risks and changes in
circumstances that are difficult to predict, and involve unknown
risks and uncertainties that may individually or materially impact
the matters discussed herein for a variety of reasons that are
outside the control of the Company, including, but not limited to,
the Company’s ability to raise sufficient financing to fund its
business plan, the impact of the Company’s exploration of strategic
alternatives, any replacement and integration of new management
team members, the implementation of new financial, management,
accounting and business software systems, the identification and
integration of possible acquisition targets and suitors, the impact
of the COVID-19 pandemic, supply chain disruptions, inflation and a
potential recession on the Company’s business, operations and the
economy in general, the Company’s ability to successfully develop
and commercialize its proprietary products and technologies, and
the Company’s ability to maintain compliance with Nasdaq’s
continued listing requirements.
Readers are cautioned not to place undue
reliance on these forward-looking statements, as actual results
could differ materially from those described in the forward-looking
statements contained herein. Readers are urged to read the risk
factors set forth in the Company’s filings with the SEC, which are
available at the SEC’s website (www.sec.gov). The Company disclaims
any intention or obligation to update or revise any forward-looking
statements, whether as a result of new information, future events
or otherwise.
For more information about Guardion Health Sciences,
Inc., Contact:
investors@guardionhealth.com Phone: 1-800 873-5141 Ext 208
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