ProPhase Labs, Inc. (NASDAQ: PRPH), a growth oriented and
diversified diagnostics, genomics and biotech company, today
reported its financial and operational results for the second
quarter ended June 30, 2022.
Second Quarter 2022
Highlights:
- Net revenue of $29.1 million for
the three months ended June 30, 2022, as compared to $9.1 million
for the three months ended June 30, 2021, an increase of
approximately 218%.
- Net income of $7.4 million, or
$0.48 per share, for the three months ended June 30, 2022, as
compared to net loss of $1.4 million, or ($0.09) per share, for the
three months ended June 30, 2021.
- Adjusted EBITDA income of $12.4
million for the three months ended June 30, 2022, as compared to
adjusted EBITDA income of $0.5 million for the three months ended
June 30, 2021.
- Cash, cash equivalents and
marketable securities of $27.5 million and net working capital of
$53.5 million at June 30, 2022.
- 188,000 diagnostic tests performed
in the quarter ended June 30, 2022, as compared to 56,000
diagnostic tests performed in the quarter ended June 30, 2021.
- Paid special cash dividend of $0.30
per share on June 03, 2022.
Additional Highlights Following Q2
2022:
- July 2022 - announced the formation
of wholly-owned subsidiary, ProPhase BioPharma, Inc., for the
licensing and development of novel drugs and compounds. Broad based
anti-virals and compounds to treat cancer currently under
development.
- July 2022 - authorized $6 million
stock repurchase program.
Ted Karkus, ProPhase Lab’s Chief Executive
Officer, commented, “Our entire team continues to generate
phenomenal results. We reported $7.4 million in net income, and our
adjusted EBITDA was even greater. While COVID-19 incidence declined
sequentially in Q2 2022, our testing levels still significantly
increased year-over-year for the six months ended June 30, 2022,
due to our extensive expansion and diversification of our customer
base over the past year, which has included independent pharmacies,
schools, concierge services in multiple states, municipal contract
wins, etc. Our strong Q2 2022 financial results continue to reflect
this growth in customers combined with more efficient
operations.”
“We expect Q3 2022 to continue to produce strong
year-over-year results as schools reopen and as the incidence of
COVID-19 is now trending higher once again. We also expect to see
additional waves of COVID-19, and note that the BA4 and BA5
variants are now spreading at an accelerated rate in the U.S. For
these reasons, we believe that demand for testing will continue for
the foreseeable future. A significant portion of our business in Q4
2021 and Q1 2022 was reimbursed by Health Resources & Services
Administration (HRSA), which as of March 22, 2022 stopped accepting
claims for COVID-19 testing and treatment due to lack of sufficient
funding. However, even without HRSA funding, we have seen continued
profitability and strong year-over-year results, thanks in large
part to our team’s ability to pivot quickly and develop a highly
effective strategy for testing without HRSA, which includes
proprietary IT for building our business.”
Mr. Karkus continued, “We are planning to expand
our high complexity molecular diagnostics lab to include clinical
testing and expand our menu to offer traditional testing (i.e.,
hematology, chemistry, immunoassays, coagulation, STDs, urinalysis,
etc.). Our offerings can also be tailored to the specific needs of
research organizations and physicians. In parallel, we plan to
build a genetics laboratory outfitted with industry leading Next
Generation Sequencing (NGS) to perform Whole Genome Sequencing
(WGS) and an array of genetic diagnostic test offerings, both
clinical and for research. We believe this expansion will open
doors to academic institutions who have a growing demand to conduct
genetic research which is at the heart of personal precision
medicine. This is in addition to our current goals to leverage our
Food, Drug and Mass distribution and infrastructure to
significantly grow direct to consumer sales of genetic tests and
ultimately, a large variety of diagnostic tests.”
“We recently formed ProPhase BioPharma to
license and develop novel drugs with significant potential. We
obtained exclusive rights worldwide to develop and commercialize
Equivir (OTC) and Equivir G (Rx), broad based anti-virals. We also
licensed at minimal cost the patented Linebacker (LB-1 and LB-2)
portfolio. The initial goal is to develop LB-1 as an anti-cancer
agent to be used as a co-therapy that targets PIM kinase receptors,
a growth factor expressed in cancer. Pre-clinical studies have
shown promising results.”
“Our estimated budget for these cancer drugs is
under $5 million over the next 12-18 months for animal studies and
an initial human clinical study. This budget is less than 10% of
our current working capital, while all of our other subsidiaries
combined continue to grow year-over-year and generate significant
profits. With positive initial clinical results, the valuation of
this wholly-owned subsidiary could be quite significant.”
“As of June 30, 2022, we had working capital of
over $50 million. We believe that we have ample cash and working
capital for all of our planned expansion initiatives for the
foreseeable future as well as for our recently announced stock
buyback program,” concluded Mr. Karkus.
Second Quarter 2022
Financial Results
For the three months ended June 30, 2022, net
revenue was $29.1 million as compared to $9.1 million for the three
months ended June 30, 2021. The increase in net revenue was the
result of a $18.6 million increase in net revenue from diagnostic
services and $1.3 million increase in consumer products. The
increase in net revenue for diagnostic services was due to
increased COVID-19 testing volumes performed as a result of the
spread of the Omicron variant, which emerged in early 2022.
Cost of revenues for the three months ended June
30, 2022 were $10.4 million, comprised of $8.4 million for
diagnostic services and $2.0 million for consumer products. Cost of
revenues for the three months ended June 30, 2021 were $4.7
million, comprised of $3.5 million for diagnostic services and $1.2
million for consumer products.
We realized a gross profit of $18.7 million for
the three months ended June 30, 2022 as compared to $4.5 million
for the three months ended June 30, 2021. The increase of $14.2
million was comprised of an increase of $13.7 million from
diagnostic services and an increase of $0.5 million in consumer
products. For the three months ended June 30, 2022 and 2021 we
realized an overall gross margin of 64.3% and 48.9%, respectively.
Gross margin for diagnostic services was 67.9% and 53.8% in the
2022 and 2021 comparable periods, respectively. The increase in
gross margin was principally due to (i) increased efficiencies in
our lab processing, (ii) a decreased sample collection costs and
(iii) a decrease in cost of test materials. Gross margin for
consumer products was 32.9% and 25.4% in the 2022 and 2021
comparable periods, respectively. Gross margin for consumer
products have historically been influenced by fluctuations in
quarter-to-quarter production volume, fixed production costs and
related overhead absorption, raw ingredient costs, inventory mark
to market write-downs and timing of shipments to customers.
Diagnostic services costs for the three months
ended June 30, 2022 were $1.8 million compared to $830,000 for the
three months ended June 30, 2021. The increase of $1.0 million was
due to increased COVID-19 testing volumes performed as a result of
the spread of the Omicron variant, which emerged in early 2022,
partially offset by a greater proportion of costs allocated to cost
of revenues as a result of the nature of agreements with network
providers.
General and administration expenses for the
three months ended June 30, 2022 were $6.3 million as compared to
$5.0 million for the three months ended June 30, 2021. The increase
of $1.3 million in general and administration expenses was
principally related to an increase in personnel expenses and
professional fees associated with our diagnostic services
business.
As a result of the effects described above, net
income/(loss) from operations for the three months ended June 30,
2022 was $7.4 million, or $0.48 per share, as compared to ($1.4
million), or ($0.09) per share, for the three months ended June 30,
2021. Diluted earnings per share for the three months ended June
30, 2022 and 2021 were $0.40 and ($0.09), respectively.
Our aggregate cash, cash equivalents and
restricted cash as of June 30, 2022 were $24.0 million as compared
to $8.7 million at December 31, 2021. Our working capital was $53.6
million and $45.8 million as of June 30, 2022 and December 31,
2021, respectively. The increase of $15.3 million in our cash, cash
equivalents and restricted cash for the six months ended June 30,
2022 was principally due to our proceeds from the sale of
marketable debt securities of $5.6 million, proceeds from
dispositions of property and other assets of $0.4 million, and
$25.1 million cash provided by operating activities, offset by (i)
purchases of marketable securities of $0.6 million, (ii) cash
dividend payments of $9.4 million, (iii) repayment of note payable
of $1.4 million, (iv) repurchase of common shares for $1.2 million,
and (v) capital expenditures of $1.8 million.
Conference Call and Webcast
Details
Management will host a conference call at 11:00
a.m. ET today, August 11, 2022, to review financial results and
provide an update on corporate developments. Following management’s
formal remarks there will be a question-and-answer session.
Participants can register for the conference
call by navigating
to:https://dpregister.com/sreg/10170246/f402767baa
Please note that registered participants will
receive their dial in number upon registration and may dial
directly into the call without delay. Those without internet access
or unable to pre-register may dial in to the conference call by
calling: 1-866-777-2509 (domestic) or 1-412-317-5413
(international). All callers should dial in approximately 10
minutes prior to the schedule start time and ask to be joined into
ProPhase Lab’s conference call.
The conference call will be broadcast live and
available for replay at
https://event.choruscall.com/mediaframe/webcast.html?webcastid=vBB4uysB and
via the investor relations section of the Company's website at
www.ProPhaseLabs.com.
A replay of the conference call will be
available approximately two hours after the call ends at the above
links. A telephonic replay of the call will be available and may be
accessed by calling 1-877-344-7529 (domestic) or 1-412-317-0088
(international) and using access code #5484565.
About ProPhase
Labs
ProPhase Labs, Inc. (Nasdaq: PRPH) (“ProPhase”)
is a growth oriented and diversified diagnostics, genomics and
biotech company that seeks to leverage its CLIA lab services to
provide whole genome sequencing and research direct to consumers
and build a genomics data base to be used for further research. The
Company continues to provide traditional CLIA molecular laboratory
services, including COVID-19 testing. The Company also continues to
operate a state-of-the-art contract manufacturing subsidiary and
the TK Supplements line of dietary supplements, distributed in
food, drug and mass stores throughout the country.
ProPhase Diagnostics, Inc., a wholly owned
subsidiary of ProPhase, offers a broad array of clinical diagnostic
and testing services at its CLIA certified laboratories including
state-of-the-art polymerase chain reaction (PCR) testing for
SARS-CoV-2 (COVID-19). Critical to COVID-19 testing, ProPhase
Diagnostics provides fast turnaround times for results. ProPhase
Diagnostics also offers best-in-class rapid antigen and
antibody/immunity tests to broaden its COVID-19 testing beyond
RT-PCR testing. We have announced plans for the expansion of the
lab to include traditional clinical testing and genomics
testing.
ProPhase Precision Medicine, Inc., a wholly
owned subsidiary of ProPhase, focuses on genomics testing
technologies, a comprehensive method for analyzing entire genomes,
including the genes and chromosomes in DNA. The data obtained from
genomic testing can help to identify inherited disorders and
tendencies, help predict disease risk, help identify expected drug
response, and characterize genetic mutations, including those that
drive cancer progression. We are currently selling Nebula Genomics
whole genome sequencing products direct-to-consumer online, with
plans to sell in food, drug and mass (FDM) stores and to provide
testing for universities conducting genomic research.
ProPhase BioPharma, Inc. (PBIO), a wholly owned
subsidiary of ProPhase, was formed for the licensing, development
and commercialization of novel drugs and compounds beginning with
Equivir and Equivir G. PBIO announced a second licensing agreement
for two small molecule PIM kinase inhibitors, Linebacker LB-1 and
LB-2, in July 2022, with plans to pursue development and
commercialization of LB-1 as a cancer co-therapy.
ProPhase Labs has decades of experience
researching, developing, manufacturing, distributing, marketing,
and selling OTC consumer healthcare products and dietary
supplements under the TK Supplements® brand and Pharmaloz
contract manufacturing subsidiary.
ProPhase actively pursues strategic investments
and acquisition opportunities for other companies, technologies,
and products.
For more information, visit
www.ProPhaseLabs.com.
Forward Looking Statements
Except for the historical information contained
herein, this document contains forward-looking statements within
the meaning of the Private Securities Litigation Reform Act of
1995, including statements regarding our strategy, plans,
objectives and initiatives, including statements regarding
projected financial results for the third quarter of 2022, our
expectations regarding the COVID-19 pandemic, future waves of the
pandemic and continued demand for diagnostic testing, our plans to
grow our diagnostic business and expand our lab services, our plans
to grow our genomics business, build a WGS laboratory and attract
academic institutions, our estimated budget for the development of
the Linebacker portfolio and our expectations regarding the
potential value of ProPhase Biopharma, Inc., and our expectations
regarding the sufficiency of our cash and working capital.
Management believes that these forward-looking statements are
reasonable as and when made. However, such forward-looking
statements involve known and unknown risks, uncertainties, and
other factors that may cause actual results to differ materially
from those projected in the forward-looking statements. These risks
and uncertainties include but are not limited to general economic
conditions, the scale, scope and duration of the COVID-19 pandemic
(including variants), consumer demand for our COVID-19 testing and
other lab processing services, our ability to collect payment for
the diagnostic tests we deliver, including our ability to collect
payment from uninsured individuals if emergency funding is not
allocated to the HRSA uninsured program in the future, challenges
relating to entering into and growing new business lines, the
competitive environment, our failure to obtain and maintain
necessary regulatory approvals, our ability to continue to ramp up
our labs’ testing capacity and execute on our business plan, and
the risk factors listed from time to time in our Annual Reports on
Form 10-K, Quarterly Reports on Form 10-Q and any other SEC
filings. The Company undertakes no obligation to update
forward-looking statements except as required by applicable
securities laws. Readers are cautioned that forward-looking
statements are not guarantees of future performance and are
cautioned not to place undue reliance on any forward-looking
statements.
Media Relations and Institutional
Investor Contact: ProPhase Labs, Inc.
267-880-1111investorrelations@prophaselabs.com
Retail Investor Relations Contact:Renmark
Financial CommunicationsJohn
Boidman514-939-3989Jboidman@renmarkfinancial.com
ProPhase Labs, Inc. and
SubsidiariesCondensed Consolidated Balance
Sheets(in
thousands, except share and per share amounts)
|
|
June 30 |
|
|
December
31, |
|
|
|
2022 |
|
|
2021 |
|
|
|
(Unaudited) |
|
|
|
|
ASSETS |
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
23,959 |
|
|
$ |
8,408 |
|
Restricted cash |
|
|
- |
|
|
|
250 |
|
Marketable debt securities, available for sale |
|
|
3,539 |
|
|
|
8,779 |
|
Marketable equity securities, at fair value |
|
|
- |
|
|
|
76 |
|
Accounts receivable, net |
|
|
36,670 |
|
|
|
37,708 |
|
Inventory, net |
|
|
4,509 |
|
|
|
4,600 |
|
Prepaid expenses and other current assets |
|
|
1,598 |
|
|
|
1,496 |
|
Total
current assets |
|
|
70,275 |
|
|
|
61,317 |
|
|
|
|
|
|
|
|
|
|
Property,
plant and equipment, net |
|
|
6,252 |
|
|
|
5,947 |
|
Prepaid
expenses, net of current portion |
|
|
167 |
|
|
|
460 |
|
Operating
lease right-of-use asset, net |
|
|
4,234 |
|
|
|
4,402 |
|
Intangible
assets, net |
|
|
9,434 |
|
|
|
10,852 |
|
Goodwill |
|
|
5,709 |
|
|
|
5,709 |
|
Deferred tax
asset |
|
|
594 |
|
|
|
- |
|
Other
assets |
|
|
1,282 |
|
|
|
608 |
|
TOTAL
ASSETS |
|
$ |
97,947 |
|
|
$ |
89,295 |
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
|
|
|
Accounts payable |
|
$ |
4,445 |
|
|
$ |
7,026 |
|
Accrued diagnostic services |
|
|
760 |
|
|
|
1,890 |
|
Accrued advertising and other allowances |
|
|
155 |
|
|
|
104 |
|
Operating lease liabilities |
|
|
628 |
|
|
|
663 |
|
Deferred revenue |
|
|
2,430 |
|
|
|
2,034 |
|
Income tax payable |
|
|
6,787 |
|
|
|
1,312 |
|
Other current liabilities |
|
|
1,517 |
|
|
|
2,495 |
|
Total
current liabilities |
|
|
16,722 |
|
|
|
15,524 |
|
|
|
|
|
|
|
|
|
|
Non-current
liabilities: |
|
|
|
|
|
|
|
|
Deferred revenue, net of current portion |
|
|
983 |
|
|
|
905 |
|
Note payable |
|
|
- |
|
|
|
44 |
|
Unsecured convertible promissory notes, net |
|
|
7,998 |
|
|
|
9,996 |
|
Operating lease liabilities, net of current portion |
|
|
4,086 |
|
|
|
4,198 |
|
Total
non-current liabilities |
|
|
13,067 |
|
|
|
15,143 |
|
Total
liabilities |
|
|
29,789 |
|
|
|
30,667 |
|
|
|
|
|
|
|
|
|
|
COMMITMENTS AND CONTINGENCIES |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity |
|
|
|
|
|
|
|
|
Preferred stock authorized 1,000,000, $0.0005 par value, no shares
issued and outstanding |
|
|
- |
|
|
|
- |
|
Common stock authorized 50,000,000, $0.0005 par value, 15,722,827
and 15,485,900 shares outstanding, respectively |
|
|
16 |
|
|
|
16 |
|
Additional paid-in capital |
|
|
106,162 |
|
|
|
104,552 |
|
Retained earnings |
|
|
13,231 |
|
|
|
2,642 |
|
Treasury stock, at cost, 17,352,419 and 16,818,846 shares,
respectively |
|
|
(51,015 |
) |
|
|
(48,407 |
) |
Accumulated other comprehensive loss |
|
|
(236 |
) |
|
|
(175 |
) |
Total stockholders' equity |
|
|
68,158 |
|
|
|
58,628 |
|
TOTAL
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
$ |
97,947 |
|
|
$ |
89,295 |
|
ProPhase Labs, Inc. and
SubsidiariesCondensed Consolidated Statements of
Operations and Other Comprehensive
Loss(in
thousands, except per share
amounts)(unaudited)
|
|
For the three months ended |
|
|
For the six months ended |
|
|
|
June 30, 2022 |
|
|
June 30, 2021 |
|
|
June 30, 2022 |
|
|
June 30, 2021 |
|
Revenues, net |
|
$ |
29,092 |
|
|
$ |
9,142 |
|
|
$ |
76,623 |
|
|
$ |
24,413 |
|
Cost of revenues |
|
|
10,372 |
|
|
|
4,676 |
|
|
|
29,226 |
|
|
|
11,020 |
|
Gross
profit |
|
|
18,720 |
|
|
|
4,466 |
|
|
|
47,397 |
|
|
|
13,393 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diagnostic expenses |
|
|
1,799 |
|
|
|
830 |
|
|
|
6,471 |
|
|
|
4,639 |
|
General and administration |
|
|
6,306 |
|
|
|
4,993 |
|
|
|
14,130 |
|
|
|
8,775 |
|
Research and development |
|
|
28 |
|
|
|
93 |
|
|
|
63 |
|
|
|
208 |
|
Total
operating expenses |
|
|
8,133 |
|
|
|
5,916 |
|
|
|
20,664 |
|
|
|
13,622 |
|
Income
(loss) from operations |
|
|
10,587 |
|
|
|
(1,450 |
) |
|
|
26,733 |
|
|
|
(229 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income, net |
|
|
25 |
|
|
|
214 |
|
|
|
98 |
|
|
|
301 |
|
Interest expense |
|
|
(201 |
) |
|
|
(323 |
) |
|
|
(434 |
) |
|
|
(574 |
) |
Change
in fair value of investment securities |
|
|
- |
|
|
|
164 |
|
|
|
(76 |
) |
|
|
164 |
|
Income
(loss) from operations before income taxes |
|
|
10,411 |
|
|
|
(1,395 |
) |
|
|
26,321 |
|
|
|
(338 |
) |
Income
tax expense |
|
|
(2,965 |
) |
|
|
- |
|
|
|
(6,381 |
) |
|
|
- |
|
Income
(loss) from operations after income taxes |
|
|
7,446 |
|
|
|
(1,395 |
) |
|
|
19,940 |
|
|
|
(338 |
) |
Net
income (loss) |
|
$ |
7,446 |
|
|
$ |
(1,395 |
) |
|
$ |
19,940 |
|
|
$ |
(338 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
comprehensive loss: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Unrealized loss on marketable debt securities |
|
|
(98 |
) |
|
|
(67 |
) |
|
|
(61 |
) |
|
|
(78 |
) |
Total
comprehensive income |
|
$ |
7,348 |
|
|
$ |
(1,462 |
) |
|
$ |
19,879 |
|
|
$ |
(416 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.48 |
|
|
$ |
(0.09 |
) |
|
$ |
1.28 |
|
|
$ |
(0.02 |
) |
Diluted |
|
$ |
0.40 |
|
|
$ |
(0.09 |
) |
|
$ |
1.07 |
|
|
$ |
(0.02 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average common shares outstanding: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
|
15,576 |
|
|
|
15,154 |
|
|
|
15,531 |
|
|
|
14,860 |
|
Diluted |
|
|
19,272 |
|
|
|
15,154 |
|
|
|
18,964 |
|
|
|
14,860 |
|
ProPhase
Labs, Inc. and SubsidiariesCondensed
Consolidated Statements of Cash
Flows(in
thousands)(unaudited)
|
|
For the six months ended |
|
|
|
June 30, 2022 |
|
|
June 30, 2021 |
|
Cash flows from operating activities |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
19,940 |
|
|
$ |
(338 |
) |
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
Realized loss on marketable debt securities |
|
|
186 |
|
|
|
7 |
|
Depreciation and amortization |
|
|
2,516 |
|
|
|
1,118 |
|
Amortization of debt discount |
|
|
2 |
|
|
|
3 |
|
Amortization on operating lease right-of-use assets |
|
|
168 |
|
|
|
167 |
|
Loss on sale of assets |
|
|
74 |
|
|
|
- |
|
Stock-based compensation expense |
|
|
1,010 |
|
|
|
1,504 |
|
Change in fair value of investment securities |
|
|
76 |
|
|
|
(164 |
) |
Accounts receivable allowances |
|
|
1,988 |
|
|
|
- |
|
Inventory valuation reserve |
|
|
25 |
|
|
|
- |
|
Non-cash interest income on secured promissory note
receivable |
|
|
- |
|
|
|
(315 |
) |
Changes in operating assets and liabilities: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
(941 |
) |
|
|
(3,466 |
) |
Inventory |
|
|
66 |
|
|
|
(12,130 |
) |
Prepaid expenses and other current assets |
|
|
104 |
|
|
|
2,434 |
|
Deferred tax asset |
|
|
(594 |
) |
|
|
|
|
Other assets |
|
|
(674 |
) |
|
|
(8 |
) |
Accounts payable |
|
|
(2,583 |
) |
|
|
3,343 |
|
Accrued diagnostic services |
|
|
(1,130 |
) |
|
|
- |
|
Accrued advertising and other allowances |
|
|
51 |
|
|
|
- |
|
Deferred revenue |
|
|
474 |
|
|
|
- |
|
Operating lease liabilities |
|
|
(147 |
) |
|
|
205 |
|
Income tax payable |
|
|
5,475 |
|
|
|
- |
|
Other current liabilities |
|
|
(978 |
) |
|
|
4,190 |
|
Net
cash provided by (used in) operating activities |
|
|
25,108 |
|
|
|
(3,450 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
|
|
Issuance of secured promissory note receivable |
|
|
- |
|
|
|
(1,000 |
) |
Purchase of marketable securities |
|
|
(607 |
) |
|
|
(16,841 |
) |
Proceeds from sale of marketable debt securities |
|
|
5,600 |
|
|
|
300 |
|
Proceeds from dispositions of property and other assets,
net |
|
|
372 |
|
|
|
- |
|
Capital expenditures |
|
|
(1,769 |
) |
|
|
(4,237 |
) |
Net
cash provided by (used in) investing activities |
|
|
3,596 |
|
|
|
(21,778 |
) |
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock from public offering,
net |
|
|
- |
|
|
|
35,135 |
|
Proceeds from issuance of common stock and warrants from
private offering |
|
|
- |
|
|
|
5,500 |
|
Repayment of note payable |
|
|
(1,444 |
) |
|
|
- |
|
Repurchases of common shares |
|
|
(1,150 |
) |
|
|
- |
|
Payment of dividends |
|
|
(9,351 |
) |
|
|
(4,546 |
) |
Repurchase of common stock for payment of statutory taxes due
on cashless exercise of stock option |
|
|
(1,458 |
) |
|
|
- |
|
Net
cash (used in) provided by financing activities |
|
|
(13,403 |
) |
|
|
36,089 |
|
|
|
|
|
|
|
|
|
|
Increase in cash, cash equivalents and restricted cash |
|
|
15,301 |
|
|
|
10,861 |
|
Cash,
cash equivalents and restricted cash, at the beginning of the
period |
|
|
8,658 |
|
|
|
6,816 |
|
Cash, cash equivalents and restricted cash, at the end of
the period |
|
$ |
23,959 |
|
|
$ |
17,677 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosures: |
|
|
|
|
|
|
|
|
Cash
paid for income taxes |
|
$ |
1,500 |
|
|
$ |
- |
|
Interest payment on the promissory notes |
|
$ |
441 |
|
|
$ |
500 |
|
|
|
|
|
|
|
|
|
|
Supplemental disclosure of non-cash investing and
financing activities: |
|
|
|
|
|
|
|
|
Issuance of common shares for debt conversion |
|
$ |
600 |
|
|
$ |
- |
|
Net
unrealized loss, investments in marketable debt securities |
|
$ |
(61 |
) |
|
$ |
(78 |
) |
Non-GAAP Financial Measures
In an effort to provide investors with
additional information regarding our results of operations as
determined by accounting principles generally accepted in the
United States of America (“GAAP”), we disclose certain non-GAAP
financial measures. The primary non-GAAP financial measure we
disclose are EBITDA and Adjusted EBITDA.
We define EBITDA as net income (loss) before net
interest expense, income taxes, depreciation and amortization.
Adjusted EBITDA further adjusts EBITDA by excluding acquisition
costs, other non-cash items, and other unusual or non-recurring
charges (as described in the table below).
Non-GAAP financial measures should not be
considered as a substitute for, or superior to, measures of
financial performance prepared in accordance with GAAP. These
non-GAAP financial measures do not reflect a comprehensive system
of accounting, differ from GAAP measures with the same names and
may differ from non-GAAP financial measures with the same or
similar names that are used by other companies. We compute non-GAAP
financial measures using the same consistent method from quarter to
quarter and year to year. We may consider whether other significant
items that arise in the future should be excluded from the non-GAAP
financial measures.
We use EBITDA and Adjusted EBITDA internally to
evaluate and manage the Company’s operations because we believe
they provide useful supplemental information regarding the
Company’s ongoing economic performance. We believes that these
non-GAAP financial measures provide meaningful supplemental
information regarding our operating results primarily because they
exclude amounts that are not considered part of ongoing operating
results when planning and forecasting and when assessing the
performance of the organization. In addition, we believe that
non-GAAP financial information is used by analysts and others in
the investment community to analyze our historical results and in
providing estimates of future performance and that failure to
report these non-GAAP measures could result in confusion among
analysts and others and create a misplaced perception that our
results have underperformed or exceeded expectations.
The following table sets forth the
reconciliations of EBITDA and Adjusted EBITDA excluding other costs
to the most comparable GAAP financial measures (in thousands):
|
|
For the three months ended |
|
|
|
June 30, 2022 |
|
|
June 30, 2021 |
|
GAAP net income (1) |
|
$ |
7,446 |
|
|
$ |
(1,395 |
) |
Interest,
net |
|
|
176 |
|
|
|
109 |
|
Income tax
expense |
|
|
2,965 |
|
|
|
- |
|
Depreciation
and amortization |
|
|
1,267 |
|
|
|
503 |
|
EBITDA |
|
|
11,854 |
|
|
|
(783 |
) |
Share-based
compensation expense |
|
|
528 |
|
|
|
1,076 |
|
Non-cash
rent expense (2) |
|
|
11 |
|
|
|
186 |
|
Bad debt
expense (3) |
|
|
- |
|
|
|
- |
|
Adjusted
EBITDA |
|
$ |
12,393 |
|
|
$ |
479 |
|
(1) We believe that net income (loss) is the
financial measure calculated and presented in accordance with GAAP
that is most directly comparable to EBITDA and Adjusted EBITDA.
EBITDA and Adjusted EBITDA measure the Company’s operating
performance without regard to certain expenses. EBITDA and Adjusted
EBITDA are not presentations made in ccordance with GAAP and the
Company’s computation of EBITDA and Adjusted EBITDA may vary from
others in the industry. EBITDA and Adjusted EBITDA have important
limitations as analytical tools and should not be considered in
isolation or as substitutes for analysis of the Company’s results
as reported under GAAP.
(2) The non-cash portion of rent, which reflects
the extent to which our GAAP rent expense recognized exceeds (or is
less than) our cash rent payments. For newer leases, our rent
expense recognized typically exceeds our cash rent payments, while
for more mature leases, rent expense recognized is typically less
than our cash rent payments.
(3) Full allowance reserved related to
restricted cash.
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