Total net sales of $25.6 million, up $6.1
million or 31% year-over-year, gross margin of 63.5% and record net
income and adjusted EBITDA of $1.9 million and $2.9 million,
respectively, for the three months ended September 30, 2024
ChromaDex Corp. (NASDAQ:CDXC) today announced financial results
for the third quarter of 2024.
Third Quarter 2024 Financial and Recent Operational
Highlights
- Total net sales were $25.6 million, with $18.1 million from Tru
Niagen®, up 31%, and 4%, respectively, from the prior year
quarter.
- Total Niagen® ingredient sales, including food-grade and
pharmaceutical-grade, reached $6.7 million, up 368% YoY.
- Delivered strong gross margin of 63.5%, up 210 basis points
from the prior year quarter.
- Sales and marketing expense as a percentage of net sales was
27.5%, an improvement of 350 basis points, compared to 31.0% from
the prior year quarter.
- Achieved net income of $1.9 million or $0.02 earnings per
share, an improvement of $2.8 million and $0.03 per share from the
prior year quarter.
- Reached record Adjusted EBITDA, a non-GAAP measure, of $2.9
million, up $2.4 million from the prior year quarter.
- In September 2024, ChromaDex expanded the availability of
Niagen+, a product line containing pharmaceutical-grade Niagen®, to
an additional 14 leading wellness clinics. These Niagen+ products,
including Niagen® IV and Niagen® Injections, are compounded and
distributed by U.S. FDA-registered 503B outsourcing facilities and
are available exclusively by prescription at participating wellness
clinics. As of October 31, 2024, ChromaDex has expanded Niagen+
availability to over 100 wellness clinics, with further significant
expansion expected in the coming weeks.
- In September 2024, ChromaDex marked its 25th anniversary. Over
the past 25 years, ChromaDex has built a reputation as the gold
standard for scientific rigor and quality. With over 275 research
agreements worldwide, more than 175 peer-reviewed publications, and
over 30 human clinical studies on Niagen®, the ChromaDex External
Research Program (CERP™) has played a pivotal role in advancing the
scientific understanding of NAD+ and its role in age-related health
conditions.
- ChromaDex has initiated discussions with the FDA and is working
to schedule meetings as part of the Company’s efforts to pursue an
Investigational New Drug (IND) application for the use of
nicotinamide riboside (NR) in the treatment of Ataxia
Telangiectasia (AT). AT is a rare, progressive disease that
typically presents in early childhood and affects the function of
the nervous system, the immune system, and several other body
systems.
“We are proud to report our best quarter to date, achieving
$25.6 million in revenue, an impressive 31% increase
year-over-year, supported by a strong gross margin of 63.5%,
record-setting net income of $1.9 million, and healthy cash flows
that have grown our operating cash to $32.4 million,” said
ChromaDex CEO Rob Fried. “These results reflect our growing
financial strength and set the stage for even greater success. This
quarter also marks the first sales of our Niagen+ products, and we
look forward to further extending their availability to more
wellness clinics as we continue to deliver innovative health
solutions to our customers.”
Results of operations for the three months
ended September 30, 2024 compared to the prior year quarter
Net Sales for ChromaDex increased 31%, or $6.1 million,
to $25.6 million. The growth in net sales was primarily driven by
increased Niagen® ingredient sales, including a significant
increase in food-grade Niagen® sales and the introduction of
pharmaceutical-grade Niagen, and more modest gains in Tru Niagen
sales.
Gross Margin improved 210 basis points to 63.5% primarily
due to changes in product mix and business mix, the recognition of
deferred revenue, and improvements in labor and overhead
utilization rates with higher sales.
Operating Expense increased 12%, or $1.5 million, to
$14.6 million.
- Selling and marketing (S&M) expense increased $1.0 million
and improved 350 basis points as a percentage of net sales to 27.5%
of net sales, reflecting greater efficiencies from the increased
investments.
- General and administrative expense increased 8%, or $0.5
million, driven by higher legal expense of $0.5 million to support
the Niagen+ launch and litigation matters.
Net Income was $1.9 million, or $0.02 per share, compared
to a net loss of $1.0 million or $(0.01) per share for the third
quarter of 2023.
Adjusted EBITDA, a non-GAAP measure, was $2.9 million, up
from $0.5 million for the third quarter of 2023. See
“Reconciliation of Non-GAAP Financial Measures” for a
reconciliation of non-GAAP Adjusted EBITDA to net loss, the most
directly comparable GAAP measure.
Cash Flows from Operating Activities had a net cash
inflow of $3.5 million for the nine months ended September 30, 2024
compared to $6.5 million in the prior year. The approximately $2.9
million reduction in cash provided by operating activities was
largely driven by a relatively greater increase in trade
receivables of $3.8 million, a greater reduction in accounts
payable and accrued expenses of $2.8 million and $1.8 million,
respectively, and lower provisions for credit losses of $0.9
million, offset by a $6.4 million improvement in net income
(loss).
2024 Full Year Outlook
Looking forward, for the full year, the Company expects
approximately 15% revenue growth year-over-year, driven by
continued revenue growth through our e-commerce business as well as
established partnerships, and includes upside from the Niagen+
product line launch. The Company projects that gross margin will
improve slightly year-over-year. Moreover, selling and marketing
expense will increase in absolute dollars but remain stable as a
percentage of net sales, as the Company continues to make focused
investments to drive brand awareness and support new market
launches, while maintaining efficiency. The Company plans to
continue to invest in research and development to drive future
innovation and expects general and administrative expense to be
down approximately $1.5 million year over year.
Investor Conference Call
A live webcast will be held Thursday, October 31, 2024 at 4:30
p.m. Eastern time (1:30 p.m. Pacific time) to discuss ChromaDex’s
third-quarter financial results and provide a general business
update.
To listen to the webcast, or to view the earnings press release
and its accompanying financial exhibits, please visit the Investors
Relations section of ChromaDex’s website at
https://investors.chromadex.com. The toll-free dial-in information
for this call is 1-888-596-4144 with Conference ID: 8584242.
The webcast will be recorded, and will be available for replay
via the website from 7:30 p.m. Eastern time on October 31, 2024
through 11:59 p.m. Eastern time on November 13, 2024. The replay of
the call can also be accessed by dialing 800-770-2030, using the
Replay ID: 8584242.
Important Note on Forward-Looking Statements:
This release contains forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, and Section
21E of the Securities Exchange Act of 1934. Statements that are not
a description of historical facts constitute forward-looking
statements and may often, but not always, be identified by the use
of such words as “expects,” “anticipates,” “intends,” “estimates,”
“plans,” “potential,” “possible,” “probable,” “believes,” “seeks,”
“may,” “will,” “should,” “could,” “predicts,” “projects,”
“continue,” “would” or the negative of such terms or other similar
expressions. Forward-looking statements include statements
regarding our intentions, beliefs, projections, outlook, analyses
or current expectations concerning, among other things: the
quotation from ChromaDex’s Chief Executive Officer, statements
related to the Company’s 2024 financial outlook including but not
limited to revenue growth, gross margin, expenses, investment
plans, and the statements regarding Niagen+. Risks that contribute
to the uncertain nature of the forward-looking statements include:
inflationary conditions and adverse economic conditions; our
history of operating losses and need to obtain additional
financing; the growth and profitability of our product sales; our
ability to maintain and grow sales, marketing and distribution
capabilities; changing consumer perceptions of our products; our
reliance on a single or limited number of third-party suppliers;
risks of conducting business in China; including unanticipated
developments in and risks related to the Company’s ability to
secure adequate quantities of pharmaceutical-grade Niagen in a
timely manner; the Company’s ability to obtain appropriate
contracts and arrangements with U.S. FDA-registered 503B
outsourcing facilities required to compound and distribute
pharmaceutical-grade Niagen to clinics; the Company’s ability to
remain on the U.S. FDA Bulk Drug Substances Nominated for Use in
Compounding Under Section 503B of the Federal Food, Drug, and
Cosmetic Act Category 1 list; the Company’s ability to maintain and
enforce the Company’s existing intellectual property and obtain new
patents; whether the potential benefits of NRC can be further
supported; further research and development and the results of
clinical trials possibly being unsuccessful or insufficient to meet
applicable regulatory standards or warrant continued development;
the ability to enroll sufficient numbers of subjects in clinical
trials; determinations made by the FDA and other governmental
authorities; and the risks and uncertainties associated with our
business and financial condition in general, described in our
filings with the Securities and Exchange Commission (SEC),
including, without limitation, our most recent Annual Report on
Form 10-K and Quarterly Report on Form 10-Q as filed with the SEC.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date hereof,
and actual results may differ materially from those suggested by
these forward-looking statements. All forward-looking statements
are qualified in their entirety by this cautionary statement and
ChromaDex undertakes no obligation to revise or update this release
to reflect events or circumstances after the date hereof.
About ChromaDex:
ChromaDex Corporation is a global bioscience company dedicated
to healthy aging. The ChromaDex team, which includes world-renowned
scientists, is pioneering research on nicotinamide adenine
dinucleotide (NAD+), an essential coenzyme that is a key regulator
of cellular metabolism and is found in every cell of the human
body. NAD+ levels in humans have been shown to decline with age,
among other factors, and may be increased through supplementation
with NAD+ precursors. ChromaDex is the innovator behind the NAD+
precursor nicotinamide riboside chloride (“NRC” commonly referred
to as “NR”), commercialized as the flagship ingredient Niagen®,
available in both food and pharmaceutical grades. Nicotinamide
riboside chloride and other NAD+ precursors are protected by
ChromaDex’s patent portfolio.
The Company delivers Niagen® as the sole or principal dietary
ingredient in its consumer product line Tru Niagen® available at
www.TruNiagen.com and through partnerships with global retailers
and distributors. The Company also develops and commercializes
proprietary-based ingredient technologies, including food-grade
Niagen® and pharmaceutical-grade Niagen®, and supplies these
ingredients as raw materials to the manufacturers of consumer
products and U.S. FDA-registered 503B outsourcing facilities,
respectively. The Company further offers natural product fine
chemicals, known as phytochemicals, and related research and
development services. Follow us on X (formerly Twitter) @ChromaDex
and Instagram @TruNiagen and subscribe to our latest news via our
website accessible at www.ChromaDex.com to which ChromaDex
regularly posts copies of its press releases as well as additional
updates and financial information about the Company.
ChromaDex Corporation and
Subsidiaries
Unaudited Condensed
Consolidated Statements of Operations
Three Months Ended
September 30,
Nine Months Ended
September 30,
2024
2023
2024
2023
(In thousands, except per share data)
Sales, net
$
25,580
$
19,495
$
70,472
$
62,374
Cost of sales
9,340
7,526
27,083
24,531
Gross profit
16,240
11,969
43,389
37,843
Operating expenses:
Sales and marketing
7,044
6,035
20,753
19,918
Research and development
1,290
1,241
4,701
3,799
General and administrative
6,304
5,840
17,320
19,557
Total operating expenses
14,638
13,116
42,774
43,274
Operating income (loss)
1,602
(1,147
)
615
(5,431
)
Nonoperating income:
Interest income, net
276
188
756
379
Net income (loss)
$
1,878
$
(959
)
$
1,371
$
(5,052
)
Net income (loss) per share attributable
to ChromaDex Corporation:
Basic
$
0.02
$
(0.01
)
$
0.02
$
(0.07
)
Diluted
$
0.02
$
(0.01
)
$
0.02
$
(0.07
)
Weighted average common shares
outstanding:
Basic
75,972
75,050
75,588
74,938
Diluted
77,768
75,050
76,804
74,938
ChromaDex Corporation and
Subsidiaries
Unaudited Condensed
Consolidated Balance Sheets
(In thousands except par values, unless
otherwise indicated)
September 30, 2024
December 31, 2023
Assets
Current assets:
Cash and cash equivalents, including
restricted cash of $152 for both periods presented
$
32,398
$
27,325
Trade receivables, net of allowances of
$90 and $68, respectively; Including receivables from Related Party
of $2.0 million and $2.8 million, respectively
7,096
5,234
Inventories
10,544
14,525
Prepaid expenses and other assets
2,096
2,450
Total current assets
52,134
49,534
Leasehold improvements and equipment,
net
1,718
2,137
Intangible assets, net
397
510
Right-of-use assets
1,899
2,400
Other long-term assets
374
383
Total assets
$
56,522
$
54,964
Liabilities and Stockholders'
Equity
Current liabilities:
Accounts payable
$
6,903
$
10,232
Accrued expenses
9,592
9,493
Current maturities of operating lease
obligations
1,008
691
Current maturities of finance lease
obligations
12
11
Customer deposits
184
195
Total current liabilities
17,699
20,622
Deferred revenue
2,579
3,311
Operating lease obligations, less current
maturities
1,873
2,563
Finance lease obligations, less current
maturities
2
12
Total stockholders’ equity
34,369
28,456
Total liabilities and stockholders’
equity
$
56,522
$
54,964
ChromaDex Corporation and
Subsidiaries
Unaudited Condensed
Consolidated Statements of Cash Flows
Nine Months Ended September
30,
(In thousands)
2024
2023
Net cash provided by / (used
in):
Operating activities
$
3,526
$
6,468
Investing activities
(74
)
(122
)
Financing activities
1,621
(14
)
Net increase in cash and cash
equivalents
5,073
6,332
Cash and cash equivalents beginning of
period
27,325
20,441
Cash and cash equivalents at end of
period
$
32,398
$
26,773
ChromaDex Corporation and
Subsidiaries
Unaudited Reconciliation of
Non-GAAP Financial Measures
Reconciliation of Net Income (Loss) to
Adjusted EBITDA
(In thousands)
Q3 2024
Q2 2024
Q1 2024
Q4 2023
Q3 2023
Net income (loss), as reported
$
1,878
$
(15
)
$
(492
)
$
114
$
(959
)
Adjustments:
Interest income, net
(276
)
(241
)
(239
)
(282
)
(188
)
Depreciation
164
170
178
177
233
Amortization of intangibles
38
37
38
39
39
Amortization of right of use assets
164
163
174
157
176
Share-based compensation
735
1,185
984
1,037
1,117
Severance and restructuring
185
276
27
5
86
Adjusted EBITDA
$
2,888
$
1,575
$
670
$
1,247
$
504
Non-GAAP Financial Information:
To supplement ChromaDex’s unaudited financial data presented in
accordance with generally accepted accounting principles (GAAP),
the Company has presented Adjusted EBITDA, a non-GAAP financial
measure. ChromaDex believes the presentation of this non-GAAP
financial measure provides important supplemental information to
management and investors and enhances the overall understanding of
the Company’s historical and current financial operating
performance. The Company believes disclosure of the non-GAAP
financial measure has substance because the excluded expenses are
infrequent in nature, are variable in nature or do not represent
current cash expenditures. Further, such non-GAAP financial measure
is among the indicators the Company uses as a basis for evaluating
the Company’s financial performance as well as for planning and
forecasting purposes. Accordingly, disclosure of this non-GAAP
financial measure provides investors with the same information that
management uses to understand the Company’s economic performance
year-over-year.
Adjusted EBITDA is defined as net income (loss) before (a)
interest, (b) depreciation, (c) amortization, (d) non-cash
share-based compensation costs and (e) severance and restructuring
expense. While ChromaDex believes that this non-GAAP financial
measure provides useful supplemental information to investors,
there are limitations associated with the use of such measure. This
measure is not prepared in accordance with GAAP and may not be
directly comparable to similarly titled measures of other companies
due to potential differences in the method of calculation.
Management compensates for these limitations by relying primarily
on the Company’s GAAP results and by using Adjusted EBITDA only
supplementally and by reviewing the reconciliation of the non-GAAP
financial measure to its most comparable GAAP financial
measure.
Non-GAAP financial measures are not prepared in accordance with,
or an alternative for, generally accepted accounting principles in
the United States. The Company’s non-GAAP financial measure is not
meant to be considered in isolation or as a substitute for
comparable GAAP financial measures and should be read only in
conjunction with the Company’s consolidated financial statements
prepared in accordance with GAAP.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20241031195705/en/
Investor Relations Ben Shamsian Lytham Partners +1 (646)
829-9701 Shamsian@LythamPartners.com
Media Relations Kendall Knysch Director of Media
Relations +1 (310) 388-6706 Ext. 689
Kendall.Knysch@ChromaDex.com
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