E-Commerce Leads Growth at 54% Year Over
Year
PHOENIX, May 11, 2023
/PRNewswire/ -- SenesTech, Inc. (NASDAQ: SNES, "SenesTech" or the
"Company"), (www.senestech.com) the rodent fertility control
experts and inventors of the only EPA-registered contraceptive for
male and female rats, ContraPest®, today announced the
first quarter of 2023 financial results.
Joel Fruendt, SenesTech's
President and Chief Executive Officer, commented, "We experienced
continued growth during the first quarter of 2023, led by strong
growth in the e-Commerce segment. Following my appointment as CEO a
few months ago, I moved to reshape our selling strategy to
re-deploy and re-focus our field sales efforts to enhance our
customer acquisition capabilities, while also putting sales reps
closer to the customers to focus on the numerous large
opportunities that are available for our unique fertility control
product. Importantly, we signed key distribution agreements with
the two largest structural pest management distributors to increase
our presence and availability with key customers. We have also seen
an increase in our top-of-funnel activities, including a profile
piece in TIME Magazine highlighting the benefits of ContraPest and
our presence at some of the industry's largest trade shows. I look
forward to the benefits of our enhanced strategy in the quarters to
come."
Sales growth during the first quarter was led by 54% growth in
the Company's e-commerce platform, which made up approximately 45%
of Q1 2023 product sales, as well as continued traction with zoos
and animal sanctuaries, and pest management professionals.
Geographically, California
continues to be a leading adopter of ContraPest following their
implementation of the Ecosystems Protection Act of 2021, which bans
the use of commonly used second-generation anticoagulant poisons
under many circumstances. In December
2022, the Company announced that the City of Los Angeles had deployed
ContraPest broadly at the Los Angeles Zoo as part of its Integrated
Pest Management program, with a deployment plan that is expected to
exceed 250 bait stations. Further, in April
2023, the Company confirmed that the County of Los Angeles is continuing and expanding its
use of fertility control in the form of ContraPest in current
requests for proposals. The Company is also seeing continued
adoption in Santa Clara and
San Francisco.
"California is a unique market
for us, with the economic, social, and political forces providing a
tremendous opportunity for ContraPest. It is particularly
gratifying to see the initial 'footholds' expanding through success
and word of mouth," added Mr. Fruendt. "That said, the unusually
wet and cold weather during the first quarter adversely impacted
California sales as certain
projects were delayed. We expect to see a recovery in the second
quarter."
As part of the Company's expanded selling strategy, SenesTech
recently signed a national distribution agreement with Target
Specialty Products for ContraPest. In addition to distribution,
Target Specialty Products and SenesTech will actively collaborate
in marketing and selling ContraPest throughout its network.
SenesTech now has renewed and expanded agreements with the two
largest structural pest management distributors: Veseris and Target
Specialty Products.
"Distributors such as Veseris and Target Specialty Products
allow us far greater reach and access into the professional market
than we would otherwise be able to afford," added Mr. Fruendt.
ContraPest has recently been showcased at several industry
conferences, including Animal Care Expo in New Orleans, New York's Rodent Roundup, and the
PEAK 2023 Poultry Show. The poultry trade show is the largest
industry trade show in the United
States and proved an ideal venue to showcase the economic
and productivity benefits ContraPest can provide when added to
other integrated pest management tools. The Company believes its
Elevate System, which directly targets roof rats in a way that no
other delivery system can, will be a key driver for growth in the
poultry market, with an addressable market size of close to
$200 million, particularly as the
effects of the recent avian bird flu subsides.
"Trade shows provide a unique opportunity to interact directly
with the pest management customers, to communicate the benefits of
ContraPest directly. Each of the introductions can then be followed
by a sales discussion with their pest management providers," added
Mr. Fruendt.
As an extension of the Company's focus on agribusiness, one of
the world's largest agricultural grain export companies deployed
ContraPest in April 2023 to select
grain storage for export facilities. It is reported that rats
destroy 20% of the global stored food supply yearly by consuming or
contaminating it.
The Company's public relations efforts continued as TIME
Magazine featured ContraPest as an innovative approach to dealing
with global rat infestations. The article highlights successful
ContraPest programs across the country, resulting in rat population
reductions of 90%, and announced the start of a program in the city
of Ferndale, MI. The story
explains that the city is moving forward with a program because
"ContraPest has the potential to change the way cities around the
world address their own rat situations by limiting the rodents'
ability to reproduce." To read the full article published in
TIME Magazine visit:
https://time.com/6264623/rat-birth-control-poison-contrapest/.
In March 2023, the Company
confirmed news reports that the Company has been working with the
Danish company TriptoBIO on the development of biosynthetic
triptolide, one of the active ingredients in ContraPest. There may
be several very distinct advantages to biosynthetic triptolide,
including more consistency in its quality and availability,
compared with botanically derived triptolide as well as a
potentially lower cost profile than botanical purification,
allowing the Company to potentially expand market penetration both
domestically and internationally.
"Beyond those points above, biosynthetic triptolide will also
provide a solid foundation for our soft bait product candidate that
we have been working on with Liphatech. That project has progressed
well, and we have several formulation candidates with which to move
forward," added Mr. Fruendt.
Q1 2023
Highlights
- Revenue during Q1 2023 was $233,000 compared to $195,000 in Q1 2022, an increase of 19%.
- Gross profit during Q1 2023 was $92,000, for a gross profit margin of 39.6%,
compared to $90,000, or a gross
profit margin of 46.2%, in Q1 2022. Excluding costs related to the
scrapping of defective inventory no longer used in our products,
gross profit margin was 57.8% in Q1 2023.
- Net loss during Q1 2023 was $2.0
million, compared with a net loss of $2.3 million for Q1 2022.
- Adjusted EBITDA loss, which is a non-GAAP measure of operating
performance, for Q1 2023 was $1.8
million compared to $2.0
million in Q1 2022.
- Cash at the end of March 2023 was
$2.7 million. Subsequent to the end
of the quarter, in April 2023, the
Company closed on a registered direct offering price at-the-market
under Nasdaq rules for gross proceeds of $1.5 million.
Use of Non-GAAP Measure
Adjusted EBITDA is a non-GAAP measure. However, this measure is
not intended to substitute for those financial measures reported in
accordance with GAAP. Adjusted EBITDA has been included because
management believes that, when considered together with the GAAP
figures, it provides meaningful information related to our
operating performance and liquidity and can enhance an overall
understanding of financial results and trends. Adjusted EBITDA may
be calculated by us differently than other companies that disclose
measures with the same or similar term. See our attached financials
for a reconciliation of this non-GAAP measure to the nearest GAAP
measure.
Conference Call Details
Date and Time: Thursday,
May 11, 2023, at 5:00 pm ET
Call-in Information: Interested
parties can access the conference call by dialing (844) 308-3351 or
(412) 317-5407.
Live Webcast Information: Interested
parties can access the conference call via a live Internet webcast,
which is available in the Investor Relations section of the
Company's website at http://senestech.investorroom.com/.
Replay: A teleconference replay of the
call will be available for seven days at (877) 344-7529 or (412)
317-0088, replay access code 7883276. A webcast replay will be
available in the Investor Relations section of the Company's
website at http://senestech.investorroom.com/ for 90 days or
https://app.webinar.net/Rxb9z48zBDo.
About SenesTech
We are "The Pest Control Difference" for the 21st century. We
are rodent fertility control specialists fueled by our passion to
create a healthy environment by virtually eliminating rodent pest
populations. We keep an inescapable truth in mind. Two rats and
their descendants can be responsible for the birth of up to 15,000
pups after a year. We invented ContraPest, the only U.S. EPA
registered contraceptive for male and female rats. ContraPest fits
seamlessly into all integrated pest management programs,
significantly improving the overall goal of effective rat
management. We strive for clean cities, efficient businesses and
happy households – with a product designed to be effective and
sustainable without killing rats. At SenesTech, we don't just
eliminate rats. We make a better world.
For more information visit https://senestech.com/ and
https://contrapeststore.com.
Safe Harbor Statement
This press release contains "forward-looking statements" within
the meaning of federal securities laws, and we intend that such
forward-looking statements be subject to the safe harbor created
thereby. Such forward-looking statements include, among others, our
belief that there are numerous large opportunities that are
available for our unique fertility control product; our belief that
we will see the benefits of our enhanced strategy in the quarters
to come; our expectation that the ContraPest deployment at the Los
Angeles Zoo will exceed 250 bait stations; our belief that
California is a unique market for
us, with the economic, social, and political forces providing a
tremendous opportunity for ContraPest; our belief that our initial
'footholds' are expanding through success and word of mouth; our
expectation that we will see a recovery in the second quarter from
the unusually wet and cold weather during the first quarter, which
adversely impacted California
sales as certain projects were delayed; our belief that
distributors such as Veseris and Target Specialty Products allow us
far greater reach and access into the professional market than we
would otherwise be able to afford; our belief that the poultry
trade show proved an ideal venue to showcase the economic and
productivity benefits ContraPest can provide when added to other
integrated pest management tools; our belief that the Elevate
System, which directly targets roof rats in a way that no other
delivery system can, will be a key driver for growth in the poultry
market, with an addressable market size of close to $200 million, particularly as the effects of the
recent avian bird flu subsides; our belief that there may be
several very distinct advantages to biosynthetic triptolide,
including more consistency in its quality and availability,
compared with botanically derived triptolide as well as a
potentially lower cost profile than botanical purification,
allowing us to potentially expand market penetration both
domestically and internationally; and our belief that biosynthetic
triptolide will also provide a solid foundation for our soft bait
product candidate that we have been working on with Liphatech,
which project has progressed well, and for which we have several
formulation candidates with which to move forward. Forward-looking
statements may describe future expectations, plans, results, or
strategies and are often, but not always, made through the use of
words such as "believe," "may," "future," "plan," "will," "should,"
"expect," "anticipate," "eventually," "project," "estimate,"
"continuing," "intend" and similar words or phrases. You are
cautioned that such statements are subject to risks, uncertainties
and other factors that could cause actual results to differ
materially from those reflected by such forward-looking statements.
Such factors include, among others, the impacts and implications of
the COVID-19 pandemic, the successful commercialization of our
products, market acceptance of our products, regulatory approval
and regulation of our products and other factors and risks
identified from time to time in our filings with the Securities and
Exchange Commission, including our Annual Report on Form 10-K for
the fiscal year ended December 31,
2022. All forward-looking statements contained in this press
release speak only as of the date on which they were made and are
based on management's assumptions and estimates as of such date.
Except as required by law, we do not undertake any obligation to
publicly update any forward-looking statements, whether as a result
of the receipt of new information, the occurrence of future events
or otherwise.
CONTACT:
Investors: Robert Blum, Lytham
Partners, LLC, 602-889-9700, senestech@lythampartners.com
Company: Tom Chesterman, Chief
Financial Officer, SenesTech, Inc., 928-779-4143
SENESTECH,
INC.
|
BALANCE
SHEETS
|
(In thousands, except
share and per share data)
|
(Unaudited)
|
|
|
March 31,
2023
|
|
December 31,
2022
|
ASSETS
|
|
|
|
Current
assets:
|
|
|
|
Cash and cash
equivalents
|
$
2,748
|
|
$
4,775
|
Accounts receivable,
net
|
46
|
|
113
|
Prepaid
expenses
|
450
|
|
378
|
Inventory,
net
|
815
|
|
853
|
Total current
assets
|
4,059
|
|
6,119
|
Right to use assets,
operating leases
|
305
|
|
347
|
Property and equipment,
net
|
259
|
|
294
|
Other noncurrent
assets
|
22
|
|
22
|
Total
assets
|
$
4,645
|
|
$
6,782
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
Current
liabilities:
|
|
|
|
Accounts
payable
|
$
215
|
|
$
540
|
Accrued
expenses
|
584
|
|
560
|
Current portion of
operating lease liability
|
184
|
|
180
|
Deferred
revenue
|
33
|
|
44
|
Total current
liabilities
|
1,016
|
|
1,324
|
Operating lease
liability, less current portion
|
132
|
|
179
|
Total
liabilities
|
1,148
|
|
1,503
|
Stockholders'
equity:
|
|
|
|
Common
stock
|
2
|
|
1
|
Additional paid-in
capital
|
127,735
|
|
127,481
|
Accumulated
deficit
|
(124,240)
|
|
(122,203)
|
Total stockholders'
equity
|
3,497
|
|
5,279
|
Total liabilities and
stockholders' equity
|
$
4,645
|
|
$
6,782
|
SENESTECH,
INC.
|
STATEMENTS OF
OPERATIONS
|
(In thousands, except
share and per share data)
|
(Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
2023
|
|
2022
|
Revenues,
net
|
|
$
233
|
|
$
195
|
Cost of
sales
|
|
141
|
|
105
|
Gross
profit
|
|
92
|
|
90
|
Operating
expenses:
|
|
|
|
|
Research and
development
|
|
387
|
|
516
|
Selling, general and
administrative
|
|
1,750
|
|
1,907
|
Total operating
expenses
|
|
2,137
|
|
2,423
|
Loss from
operations
|
|
(2,045)
|
|
(2,333)
|
Other income,
net
|
|
8
|
|
1
|
Net loss
|
|
$
(2,037)
|
|
$
(2,332)
|
Weighted average shares
outstanding - basic and diluted
|
|
1,538,514
|
|
610,450
|
Loss per share - basic
and diluted
|
|
$
(1.32)
|
|
$
(3.82)
|
SenesTech
Inc.
|
Itemized
Reconciliation Between Net Loss and Adjusted EBITDA
(non-GAAP)
|
(In
thousands)
|
(Unaudited)
|
|
|
|
Three Months Ended
March 31,
|
|
|
2023
|
|
2022
|
Net loss (as reported,
GAAP)
|
|
$
(2,037)
|
|
$
(2,332)
|
Non-GAAP
adjustments:
|
|
|
|
|
Interest income,
net
|
|
(8)
|
|
(1)
|
Stock-based
compensation expense
|
|
166
|
|
224
|
Depreciation
expense
|
|
36
|
|
66
|
Total non-GAAP
adjustments
|
|
194
|
|
289
|
Adjusted EBITDA loss
(non-GAAP)
|
|
$
(1,843)
|
|
$
(2,043)
|
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SOURCE SenesTech, Inc.