- Eyecare product revenue increased 8% driven by higher sales of
Avenova®-branded products through online channels
- Sales and marketing expenses declined 13% reflecting efficient
growth through digital marketing optimization
- Balance sheet strengthened with $3.9 million financing in
July
Conference call begins at 4:30 p.m. Eastern
time today
NovaBay® Pharmaceuticals, Inc. (NYSE American: NBY) reports
financial results for the three and six months ended June 30, 2024
and provides a business update.
“Revenue growth was driven by higher Avenova sales through
online channels including an expanded subscription customer base,”
said Justin Hall, CEO of NovaBay. “The number of Subscribe &
Save customers on Amazon.com increased 16% during the first half of
the year. In fact, subscriber sales on Amazon.com and Avenova.com
accounted for approximately 24% of all online Avenova sales year to
date. These recurring sales create predictable revenue, provide a
strong foundation for future growth and allow us to efficiently
manage our sales and marketing spend, which decreased 13% for the
quarter. These repeat sales also give us confidence in achieving
our goal of 2024 net revenue from our eyecare business of
approximately $10.0 million.
“Following the close of the quarter we completed a capital raise
that strengthened our balance sheet, allowing us to pursue
strategic and fundamental transactions from a position of
strength,” he added.
Second Quarter Financial Results
Financial results for the three and six months ended June 30,
2024 and 2023 do not include results from DERMAdoctor, which was
divested on March 25, 2024 and is accounted for in discontinued
operations. Financial information about discontinued operations is
available under “Divestiture and Discontinued Operations” in the
Company’s Quarterly Report on Form 10-Q for the quarter ended June
30, 2024, which will be filed with the Securities and Exchange
Commission (the “SEC”) later
today.
Total sales, net for the second quarter of 2024 were $2.4
million. Essentially all net sales for the quarter were derived
from sales of eyecare products, which increased 8% over the prior
year due to more Avenova®-branded products sold through online
channels. Total sales, net for the second quarter of 2023 were $3.5
million, which included $2.2 million from eyecare products and $1.3
million from wound care products, including a large order of
NeutroPhase®-branded wound care products with no comparable order
in the 2024 period.
Gross margin on net sales for the second quarter of 2024 was
66%, compared with 49% for the second quarter of 2023, with the
improvement primarily due to product mix.
Sales and marketing expenses for the second quarter of 2024 were
$1.0 million, a 13% decrease from $1.2 million for the prior-year
period, reflecting continued efficiencies in digital advertising
and lower professional services. General and administrative
(G&A) expenses for the second quarters of 2024 and 2023
remained consistent at $1.6 million. Research & development
(R&D) expenses for the second quarter of 2024 were $9 thousand,
versus $22 thousand for the prior-year period.
Non-cash items for the second quarter of 2024 included a loss on
the change in fair value of warrant liabilities of $80 thousand and
a loss on adjustments to the fair value of embedded derivative
liability of $83 thousand. Non-cash items for the second quarter of
2023 included a gain on changes in fair value of warrant
liabilities of $216 thousand and a gain on change in fair value of
embedded derivative liability of $40 thousand. Accretion of
interest and amortization of discounts on convertible notes for the
second quarter of 2024 was $0.3 million, compared with $0.5 million
for the second quarter of 2023.
Other expense, net for the second quarter of 2024 was $69
thousand, compared with $0.4 million for the second quarter of
2023, with the decrease due primarily to higher financing costs in
the prior-year period.
Net loss attributable to common stockholders for the second
quarter of 2024 was $1.6 million, or $1.37 per share. This compares
with a net loss attributable to common stockholders for the second
quarter of 2023 of $4.0 million, or $44.43 per share, which
included a $2.0 million non-cash increase to accumulated deficit
due to an adjustment to the preferred stock conversion price.
Six Month Financial Results
Total sales, net for the six months ended June 30, 2024 was $5.0
million, compared with $5.9 million for the six months ended June
30, 2023.
Gross margin on net sales for the first half of 2024 increased
to 67% from 57% for the first half of 2023.
For the six months ended June 30, 2024, sales and marketing
expenses decreased 14% and G&A expenses increased 19%, both
compared with the six months ended June 30, 2023. R&D expenses
were $28 thousand for the first half of 2024, versus $32 thousand
for the prior-year period.
Net loss attributable to common stockholders for the first half
of 2024 was $5.2 million, or $5.57 per share, compared with a net
loss for the first half of 2023 of $5.8 million, or $77.42 per
share.
NovaBay had cash and cash equivalents of $0.8 million as of June
30, 2024, compared with $2.9 million as of December 31, 2023. In
July 2024, the Company completed an underwritten public offering
raising gross proceeds of $3.9 million.
Conference Call
NovaBay management will host an investment community conference
call today beginning at 4:30 p.m. Eastern time (1:30 p.m. Pacific
time) to discuss the Company’s financial and operational results
and answer questions. Participants can pre-register for the
conference call here. Callers who pre-register will be given a
conference passcode and unique PIN to gain immediate access to the
call and bypass the live operator. Participants may pre-register at
any time, including up to and after the call start time.
Stockholders and other interested parties may also participate
in the conference call by dialing 833-816-1121 from within the U.S.
or 412-317-1862 from outside the U.S. and requesting the NovaBay
Pharmaceuticals call.
A live webcast of the call will be available here and will be
archived for 90 days. A replay of the call will be available
beginning two hours after the call ends through September 3, 2024
by dialing 877-344-7529 from within the U.S., 855-669-9658 from
Canada or 412-317-0088 from outside the U.S. and Canada, and
entering the conference identification number 3413491.
About NovaBay Pharmaceuticals, Inc.
NovaBay's leading product Avenova® Antimicrobial Lid & Lash
Solution is often recommended by eyecare professionals for
blepharitis and dry eye disease. Manufactured in the U.S., Avenova
spray is formulated with NovaBay's patented, proprietary, stable
and pure form of hypochlorous acid. All Avenova products are
available directly to consumers through online distribution
channels such as Amazon.com and Avenova.com.
Forward-Looking Statements
This release contains information about management's view of the
Company's future expectations, plans and prospects that constitute
forward-looking statements within the meaning of the “safe harbor”
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements can be identified by the fact that they
do not relate strictly to historic or current facts. Such
forward-looking statements are based upon management’s current
expectations, assumptions, estimates, projections and beliefs.
These statements include, but are not limited to, statements
regarding our business strategies, commercial progress, current and
potential future product offerings, expanded access to our products
through new and existing sales channels, and any future revenue,
and the timing of such revenue, that may result from selling these
products, as well as generally the Company’s expected future
financial results. These statements involve known and unknown
risks, uncertainties and other factors that may cause actual
results or achievements to be materially different and adverse from
those expressed in or implied by these forward-looking statements.
Factors that might cause or contribute to such differences include,
but are not limited to, risks and uncertainties relating to the
size of the potential market for our products, the Company’s
products not being able to penetrate one or more targeted markets
and the Company’s ability to continue as a going concern and
revenues (or the execution on capital raise opportunities) not
being sufficient to meet the Company’s cash needs. Other risks
relating to NovaBay’s business, including risks that could cause
results to differ materially from those projected in the
forward-looking statements in this press release, are detailed in
the Company’s latest Form 10-K/Q filings and registration
statements, as may be amended from time to time, with the SEC,
especially under the heading “Risk Factors.” The forward-looking
statements in this release speak only as of this date, and the
Company disclaims any intent or obligation to revise or update
publicly any forward-looking statement except as required by
law.
Socialize and Stay Informed on
NovaBay’s Progress Like us on Facebook Follow us on X
Connect with NovaBay on LinkedIn Visit NovaBay’s Website
Avenova Purchasing
Information For NovaBay Avenova purchasing information:
Please call 800-890-0329 or email sales@avenova.com Avenova.com
Financial tables follow
NOVABAY PHARMACEUTICALS,
INC.
CONDENSED CONSOLIDATED BALANCE
SHEETS
(in thousands, except par
value amounts)
June 30,
2024
December 31,
2023
(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents
$
751
$
2,924
Accounts receivable, net of allowance for
credit losses ($3 at June 30, 2024 and December 31, 2023)
547
680
Inventory, net of allowance for excess and
obsolete inventory and lower of cost or estimated net realizable
value adjustments ($204 and $264 at June 30, 2024 and December 31,
2023, respectively)
700
564
Prepaid expenses and other current
assets
255
256
Current assets, discontinued
operations
—
2,730
Total current assets
2,253
7,154
Operating lease right-of-use assets
1,128
1,296
Property and equipment, net
68
87
Other assets
476
478
Other assets, discontinued operations
—
19
TOTAL ASSETS
$
3,925
$
9,034
LIABILITIES AND STOCKHOLDERS’
(DEFICIT) EQUITY
Liabilities:
Current liabilities:
Accounts payable
$
1,235
$
906
Accrued liabilities
1,297
1,169
Secured Convertible Notes, net of
discounts
655
1,137
Unsecured Convertible Notes, net of
discounts
41
—
Operating lease liabilities
382
368
Current liabilities, discontinued
operations
—
698
Total current liabilities
3,610
4,278
Warrant liabilities
—
334
Operating lease
liabilities-non-current
932
1,108
Total liabilities
4,542
5,720
Commitments and contingencies
Stockholders’ (deficit) equity:
Preferred stock, $0.01 par value; 5,000
shares authorized;
Series B Preferred Stock; 1 and 6 shares
issued and outstanding at June 30, 2024 and December 31, 2023,
respectively
6
275
Series C Preferred Stock; 0 and 1 shares
issued and outstanding at June 30, 2024 and December 31, 2023,
respectively
—
1,675
Common stock, $0.01 par value; 150,000
shares authorized, 1,348 and 321 shares issued and outstanding at
June 30, 2024 and December 31, 2023, respectively*
13
3
Additional paid-in capital*
179,392
176,210
Accumulated deficit
(180,028
)
(174,849
)
Total stockholders’ (deficit) equity
(617
)
3,314
TOTAL LIABILITIES AND STOCKHOLDERS’
(DEFICIT) EQUITY
$
3,925
$
9,034
NOVABAY PHARMACEUTICALS,
INC.
CONDENSED CONSOLIDATED
STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per
share data)
Three Months Ended June
30,
Six Months Ended
June 30,
2024
2023
2024
2023
Sales:
Product revenue, net
$
2,387
$
3,523
$
5,011
$
5,855
Other revenue, net
13
11
20
18
Total sales, net
2,400
3,534
5,031
5,873
Cost of goods sold
808
1,795
1,645
2,534
Gross profit
1,592
1,739
3,386
3,339
Operating expenses:
Research and development
9
22
28
32
Sales and marketing
1,019
1,175
2,074
2,411
General and administrative
1,617
1,593
3,908
3,292
Loss on divestiture of subsidiary
—
—
865
—
Total operating expenses
2,645
2,790
6,875
5,735
Operating loss
(1,053
)
(1,051
)
(3,489
)
(2,396
)
Non-cash (loss) gain on changes in fair
value of warrant liabilities
(80
)
216
114
216
Non-cash (loss) gain on change in fair
value of embedded derivative liability
(83
)
40
(18
)
40
Accretion of interest and amortization of
discounts on convertible notes
(300
)
(501
)
(733
)
(501
)
Other expense, net
(69
)
(432
)
(549
)
(432
)
Net loss from continuing operations
(1,585
)
(1,728
)
(4,675
)
(3,073
)
Net loss from discontinued operations
—
(308
)
(124
)
(702
)
Net loss
(1,585
)
(2,036
)
(4,799
)
(3,775
)
Less: Increase to accumulated deficit due
to adjustment to Preferred Stock conversion price
—
(1,996
)
(380
)
(1,996
)
Net loss attributable to common
stockholders
$
(1,585
)
$
(4,032
)
$
(5,179
)
$
(5,771
)
Basic and diluted net loss per share
Net loss per share from continuing
operations*
$
(1.37
)
$
(41.04
)
$
(5.44
)
$
(68.00
)
Net loss per share from discontinued
operations*
—
(3.39
)
(0.13
)
(9.42
)
Net loss per share attributable to common
stockholders (basic and diluted)*
$
(1.37
)
$
(44.43
)
$
(5.57
)
$
(77.42
)
Weighted-average shares of common stock
outstanding used in computing net loss per share of common stock
(basic and diluted)*
1,155
91
930
75
* After giving retroactive effect to a
1-for-35 reverse stock split that became effective May 30,
2024.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240813722587/en/
NovaBay Contact Justin Hall
Chief Executive Officer and General Counsel 510-899-8800
jhall@novabay.com
Investor Contact LHA
Investor Relations Jody Cain 310-691-7100 jcain@lhai.com
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