Second Quarter 2024 and Recent Selected Highlights:
- Record revenues of $48.9 million
- GAAP net loss of $(6.5) million
- Adjusted EBITDA of $8.8 million
- Cash and cash equivalents of $71.0 million as of June 30,
2024
- IHEEZO® customer unit demand volume increased by 98% from the
first quarter of 2024
- IHEEZO supply agreements total 24 agreements to date in 2024,
including a recent win with the largest and highest volume U.S.
retina practice group
- VEVYE® total prescriptions increased by 212% from the first
quarter of 2024
- Anterior Segment revenues up over 40% from the first quarter of
2024
- Record quarterly revenues from Harrow’s ImprimisRx
subsidiary
Harrow (Nasdaq: HROW), a leading North American eyecare
pharmaceutical company, announced results for the second quarter
and six months ended June 30, 2024. The Company also posted its
second quarter Letter to Stockholders and corporate presentation to
the “Investors” section of its website, harrow.com. The Company
encourages all Harrow stockholders to review these documents, which
provide additional details concerning the historical quarterly
period and future expectations for the business.
This press release features multimedia. View
the full release here:
https://www.businesswire.com/news/home/20240807453796/en/
“The second quarter of 2024 marked a financial and operational
turning point for Harrow, with revenues surging 46% compared to the
same quarter last year and 42% over the previous quarter,” said
Mark L. Baum, Chief Executive Officer of Harrow. “This remarkable
growth, which was years in the making, was driven by exceptional
performance across all Harrow business segments, most notably
IHEEZO and VEVYE. Our team also continues to advance the relaunch
of TRIESENCE® during 2024, with initial analytical test results for
the second process performance qualification (PPQ) batch
demonstrating in-specification results and the third PPQ batch
scheduled to be manufactured in a matter of days. This outstanding
quarterly report is a testament to the dedication of the entire
Harrow Family, which is being continuously strengthened by the
addition of experienced and motivated high-impact individuals. We
are excited about where we are today, confident that we are poised
for, and expect to achieve, further revenue and profitability
expansion in the coming quarters and years.”
Second quarter 2024 figures of merit:
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2024
2023
2024
2023
Total revenues
$
48,939,000
$
33,470,000
$
83,526,000
$
59,573,000
Gross margin
74
%
70
%
72
%
69
%
Core gross margin(1)
79
%
78
%
77
%
77
%
Net loss
(6,473,000
)
(4,229,000
)
(20,038,000
)
(10,872,000
)
Core net loss(1)
(2,047,000
)
(494,000
)
(11,836,000
)
(1,536,000
)
Adjusted EBITDA(1)
8,803,000
11,005,000
9,030,000
16,347,000
Basic and diluted net loss per share
(0.18
)
(0.14
)
(0.56
)
(0.36
)
Core basic and diluted net loss per
share(1)
(0.06
)
(0.02
)
(0.33
)
(0.05
)
(1)
Core gross margin, core net loss, core
basic and diluted net loss per share (collectively, “Core
Results”), and Adjusted EBITDA are non‑GAAP measures. For
additional information, including a reconciliation of such Core
Results and Adjusted EBITDA to the most directly comparable
measures presented in accordance with GAAP, see the explanation of
non‑GAAP measures and reconciliation tables at the end of this
release.
Conference Call and Webcast
The Company’s management team will host a conference call and
live webcast tomorrow morning, Thursday, August 8, 2024, at 8:00
a.m. Eastern time to discuss the second quarter 2024 results and
provide a business update. Participants can access the live
conference call via webcast on the “Investors” page of Harrow’s
website. To participate via telephone, please register in advance
using this link. Upon registration, all telephone participants will
receive a confirmation email with detailed instructions, including
a unique dial-in number and PIN, for accessing the call. A replay
of the conference call webcast will be archived on the Company’s
website for one year.
About Harrow
Harrow, Inc. (Nasdaq: HROW) is a leading eyecare pharmaceutical
company engaged in the discovery, development, and
commercialization of innovative ophthalmic pharmaceutical products
for the North American market. Harrow helps eyecare professionals
preserve the gift of sight by making its comprehensive portfolio of
prescription and non‑prescription pharmaceutical products
accessible and affordable to millions of patients each year. For
more information about Harrow, please visit harrow.com.
Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of the U.S. Private Securities Litigation Reform Act of
1995. Any statements in this release that are not historical facts
may be considered such “forward-looking statements.”
Forward-looking statements are based on management's current
expectations and are subject to risks and uncertainties which may
cause results to differ materially and adversely from the
statements contained herein. Some of the potential risks and
uncertainties that could cause actual results to differ from those
predicted include, among others, risks related to: liquidity or
results of operations; our ability to successfully implement our
business plan, develop and commercialize our products, product
candidates and proprietary formulations in a timely manner or at
all, identify and acquire additional products, manage our pharmacy
operations, service our debt, obtain financing necessary to operate
our business, recruit and retain qualified personnel, manage any
growth we may experience and successfully realize the benefits of
our previous acquisitions and any other acquisitions and
collaborative arrangements we may pursue; competition from
pharmaceutical companies, outsourcing facilities and pharmacies;
general economic and business conditions, including inflation and
supply chain challenges; regulatory and legal risks and
uncertainties related to our pharmacy operations and the pharmacy
and pharmaceutical business in general; physician interest in and
market acceptance of our current and any future formulations and
compounding pharmacies generally. These and additional risks and
uncertainties are more fully described in Harrow’s filings with the
Securities and Exchange Commission (SEC), including its Annual
Report on Form 10-K for the year ended December 31, 2023,
subsequent Quarterly Reports on Form 10-Q, and other filings with
the SEC. Such documents may be read free of charge on the SEC's web
site at sec.gov. Undue reliance should not be placed on
forward‑looking statements, which speak only as of the date they
are made. Except as required by law, Harrow undertakes no
obligation to update any forward-looking statements to reflect new
information, events, or circumstances after the date they are made,
or to reflect the occurrence of unanticipated events.
HARROW, INC. CONDENSED
CONSOLIDATED BALANCE SHEETS
June 30, 2024
December 31, 2023
(unaudited)
ASSETS
Cash and cash equivalents
$
70,968,000
$
74,085,000
All other current assets
68,422,000
65,397,000
Total current assets
139,390,000
139,482,000
All other assets
167,240,000
172,682,000
TOTAL ASSETS
$
306,630,000
$
312,164,000
LIABILITIES AND STOCKHOLDERS’
EQUITY
Current liabilities
$
53,551,000
$
49,344,000
Loans payable, net of unamortized debt
discount
185,023,000
183,172,000
All other liabilities
9,879,000
9,237,000
TOTAL LIABILITIES
248,453,000
241,753,000
TOTAL STOCKHOLDERS' EQUITY
58,177,000
70,411,000
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
306,630,000
$
312,164,000
HARROW, INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2024
2023
2024
2023
Total revenues
$
48,939,000
$
33,470,000
$
83,526,000
$
59,573,000
Cost of sales
12,539,000
10,000,000
23,092,000
18,271,000
Gross profit
36,400,000
23,470,000
60,434,000
41,302,000
Selling, general and administrative
31,817,000
19,957,000
60,630,000
35,845,000
Research and development
3,053,000
1,161,000
5,202,000
1,895,000
Total operating expenses
34,870,000
21,118,000
65,832,000
37,740,000
Income (loss) from operations
1,530,000
2,352,000
(5,398,000
)
3,562,000
Total other expense, net
(7,348,000
)
(6,596,000
)
(13,985,000
)
(14,737,000
)
Income tax (expense) benefit
(655,000
)
15,000
(655,000
)
303,000
Net loss attributable to Harrow,
Inc.
$
(6,473,000
)
$
(4,229,000
)
$
(20,038,000
)
$
(10,872,000
)
Net loss per share of common stock,
basic and diluted
$
(0.18
)
$
(0.14
)
$
(0.56
)
$
(0.36
)
HARROW, INC.
UNAUDITED CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Six Months Ended
June 30,
2024
2023
Net cash (used in) provided by:
Operating activities
$
(7,374,000
)
$
(3,648,000
)
Investing activities
4,993,000
(132,219,000
)
Financing activities
(736,000
)
62,351,000
Net change in cash and cash
equivalents
(3,117,000
)
(73,516,000
)
Cash and cash equivalents at beginning of
the period
74,085,000
96,270,000
Cash and cash equivalents at end of the
period
$
70,968,000
$
22,754,000
Non-GAAP Financial Measures
In addition to the Company’s results of operations determined in
accordance with U.S. generally accepted accounting principles
(GAAP), which are presented and discussed above, management also
utilizes Adjusted EBITDA and Core Results, unaudited financial
measures that are not calculated in accordance with GAAP, to
evaluate the Company’s financial results and performance and to
plan and forecast future periods. Adjusted EBITDA and Core Results
are considered “non‑GAAP” financial measures within the meaning of
Regulation G promulgated by the SEC. Management believes that these
non-GAAP financial measures reflect an additional way of viewing
aspects of the Company’s operations that, when viewed with GAAP
results, provide a more complete understanding of the Company’s
results of operations and the factors and trends affecting its
business. Management believes Adjusted EBITDA and Core Results
provide meaningful supplemental information regarding the Company’s
performance because (i) they allow for greater transparency with
respect to key metrics used by management in its financial and
operational decision-making; (ii) they exclude the impact of
non-cash or, when specified, non-recurring items that are not
directly attributable to the Company’s core operating performance
and that may obscure trends in the Company’s core operating
performance; and (iii) they are used by institutional investors and
the analyst community to help analyze the Company’s results.
However, Adjusted EBITDA, Core Results, and any other non-GAAP
financial measures should be considered as a supplement to, and not
as a substitute for, or superior to, the corresponding measures
calculated in accordance with GAAP. Further, non‑GAAP financial
measures used by the Company and the way they are calculated may
differ from the non-GAAP financial measures or the calculations of
the same non‑GAAP financial measures used by other companies,
including the Company’s competitors.
Adjusted EBITDA
The Company defines Adjusted EBITDA as net loss, excluding the
effects of stock‑based compensation and expenses, interest, taxes,
depreciation, amortization, investment loss (income), net, and, if
any and when specified, other non-recurring income or expense
items. Management believes that the most directly comparable GAAP
financial measure to Adjusted EBITDA is net loss. Adjusted EBITDA
has limitations and should not be considered as an alternative to
gross profit or net loss as a measure of operating performance or
to net cash (used in) provided by operating, investing, or
financing activities as a measure of ability to meet cash
needs.
The following is a reconciliation of Adjusted EBITDA, a non-GAAP
measure, to the most comparable GAAP measure, net loss, for the
three months and six months ended June 30, 2024 and for the same
periods in 2023:
HARROW, INC.
RECONCILIATION OF NET LOSS TO
ADJUSTED EBITDA
For the Three Months Ended
June 30,
For the Six Months Ended June
30,
2024
2023
2024
2023
GAAP net loss
$
(6,473,000
)
$
(4,229,000
)
$
(20,038,000
)
$
(10,872,000
)
Stock-based compensation and expenses
4,271,000
5,412,000
8,440,000
7,045,000
Interest expense, net
5,471,000
5,704,000
10,886,000
10,451,000
Income taxes
655,000
(15,000
)
655,000
(303,000
)
Depreciation
453,000
398,000
885,000
690,000
Amortization of intangible assets
2,549,000
2,843,000
5,103,000
5,050,000
Investment loss (income), net
1,923,000
714,000
3,171,000
(1,328,000
)
Other (income) expense, net
(46,000
)
178,000
(72,000
)
5,614,000
(1)
Adjusted EBITDA
$
8,803,000
$
11,005,000
$
9,030,000
$
16,347,000
(1)
Includes $5,465,000 for the loss on
extinguishment of debt.
Core Results
Harrow Core Results, including core gross margin, core net loss,
and core basic and diluted loss per share exclude (1) all
amortization and impairment charges of intangible assets, excluding
software development costs, (2) net gains and losses on investments
and equity securities, including equity method gains and losses and
equity valued at fair value through profit and loss (FVPL), and
preferred stock dividends, and (3) gains/losses on forgiveness of
debt. In other periods, Core Results may also exclude fair value
adjustments of financial assets in the form of options to acquire a
company carried at FVPL, obligations related to product recalls,
certain acquisition‑related items, restructuring charges/releases
and associated items, related legal items, gains/losses on early
extinguishment of debt or debt modifications, impairments of
property, plant and equipment and software, as well as income and
expense items that management deems exceptional and that are or are
expected to accumulate within the year to be over a $100,000
threshold.
The following is a reconciliation of Core Results, non-GAAP
measures, to the most comparable GAAP measures for the three months
and six months ended June 30, 2024 and for the same periods in
2023:
For the Three Months Ended
June 30, 2024
GAAP
Results
Amortization of Certain
Intangible Assets
Investment
Gains
Other
Items
Core
Results
Gross profit
$
36,400,000
$
2,140,000
$
-
$
-
$
38,540,000
Gross margin
74
%
79
%
Operating income
1,530,000
2,549,000
-
-
4,079,000
(Loss) income before taxes
(5,818,000
)
2,549,000
1,923,000
(46,000
)
(1,392,000
)
Taxes
(655,000
)
-
-
-
(655,000
)
Net (loss) income
(6,473,000
)
2,549,000
1,923,000
(46,000
)
(2,047,000
)
Basic and diluted loss
per share ($)(1)
(0.18
)
(0.06
)
Weighted average number of shares of
common stock outstanding, basic and diluted
35,618,977
35,618,977
For the Six Months Ended June
30, 2024
GAAP
Results
Amortization of Certain
Intangible Assets
Investment
Gains
Other
Items
Core
Results
Gross profit
$
60,434,000
$
4,280,000
$
-
$
-
$
64,714,000
Gross margin
72
%
77
%
Operating loss
(5,398,000
)
5,103,000
-
-
(295,000
)
(Loss) income before taxes
(19,383,000
)
5,103,000
3,171,000
(72,000
)
(11,181,000
)
Taxes
(655,000
)
-
-
-
(655,000
)
Net (loss) income
(20,038,000
)
5,103,000
3,171,000
(72,000
)
(11,836,000
)
Basic and diluted loss per share
($)(1)
(0.56
)
(0.33
)
Weighted average number of shares of
common stock outstanding, basic and diluted
35,544,312
35,544,312
For the Three Months Ended
June 30, 2023
GAAP
Results
Amortization of Certain
Intangible Assets
Investment
Gains
Other
Items
Core
Results
Gross profit
$
23,470,000
$
2,649,000
$
-
$
-
$
26,119,000
Gross margin
70
%
78
%
Operating income
2,352,000
2,843,000
-
-
5,195,000
(Loss) income before taxes
(4,244,000
)
2,843,000
714,000
178,000
(509,000
)
Taxes
15,000
-
-
-
15,000
Net (loss) income
(4,229,000
)
2,843,000
714,000
178,000
(494,000
)
Basic and diluted loss
per share ($)(1)
(0.14
)
(0.02
)
Weighted average number of shares of
common stock outstanding, basic and diluted
30,458,677
30,458,677
For the Six Months Ended June
30, 2023
GAAP
Results
Amortization of Certain
Intangible Assets
Investment
Losses
Other
Items
Core
Results
Gross profit
$
41,302,000
$
4,694,000
$
-
$
-
$
45,996,000
Gross margin
69
%
77
%
Operating income
3,562,000
5,050,000
-
-
8,612,000
(Loss) income before taxes
(11,175,000
)
5,050,000
(1,328,000
)
5,614,000
(1,839,000
)
Taxes
303,000
-
-
-
303,000
Net (loss) income
(10,872,000
)
5,050,000
(1,328,000
)
5,614,000
(1,536,000
)
Basic and diluted loss per share
($)(1)
(0.36
)
(0.05
)
Weighted average number of shares of
common stock outstanding, basic and diluted
30,379,354
30,379,354
(1)
Core basic and diluted loss per share is
calculated using the weighted-average number of shares of common
stock outstanding during the period. Core basic and diluted loss
per share also contemplates dilutive shares associated with
equity‑based awards as described in Note 2 and elsewhere in the
Condensed Consolidated Financial Statements included in the
Company’s Quarterly Report on Form 10-Q for the quarter ended June
30, 2024.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240807453796/en/
Jamie Webb, Director of Communications and Investor Relations
jwebb@harrowinc.com 615-733-4737
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