Full Press Release Details
ChromaDex Corporation Reports Third Quarter 2021 Financial Results
Total company net sales of $17.3 million for the three months ended September 30, 2021, with Tru Niagen net sales of $14.8 million, up 24% from the prior year quarter and gross margin of 61.1% for the quarter.
LOS ANGELES, CA - November 3, 2021 - ChromaDex Corp. (NASDAQ CDXC) today announced financial results for the third quarter of 2021.
Third Quarter 2021 and Recent Highlights
Total net sales were $17.3 million, up 22% from the prior year quarter.
Tru Niagen net sales were $14.8 million, a 24% increase from the prior year quarter.
Gross margin was 61.1%, a 150 basis point increase from the prior year quarter.
Net loss was $(8.9) million or $(0.13) per share, a decline of $0.06 per share from the prior year quarter.
Adjusted EBITDA excluding total legal expense, a non-GAAP measure, was a loss of $(0.6) million, a $0.5 million decline from the prior year quarter.
Announced partnership with Sinopharm Xingsha, a subsidiary of one of China's largest pharmaceutical companies, to conduct cross-border sales of Tru Niagen in Mainland China, and collaborate to secure Health Food Registration.
Study published in September 2021 on nicotinamide riboside (NR) supplementation in children with Ataxia-Telangiectasia (AT), a prematurely aging population, showed improvement in ataxia scores and increased antibodies in immune-compromised patients.
Clinical study published in October 2021 in Molecular Systems Biology finds nutritional protocol including nicotinamide riboside (NR) significantly decreases liver fat and improves liver function.
"This quarter marks an inflection point for ChromaDex," said CEO, Rob Fried. "With the litigation largely behind us, we are focusing more resources, both human and financial, on building the Tru Niagen brand, furthering our science, and developing our global partnerships. We recently partnered with Sinopharm Xingsha, one of the most prestigious healthcare companies in China, which will enable us to capitalize on the tremendous opportunity for Tru Niagen in that market."
Results of operations for the three months ended September 30, 2021
For the three months ended September 30, 2021 ("Q3 2021"), ChromaDex reported net sales of $17.3 million, up $3.1 million or 22% compared to the third quarter of 2020 ("Q3 2020"). The increase in Q3 2021 revenues was largely driven by growth in sales of Tru Niagen paired with slight growth in Niagen and other ingredient sales.
Gross margin percentage improved by 150 basis points to 61.1% in Q3 2021 compared to 59.6% in Q3 2020. The improvement in gross margin percentage was driven by the positive impact of increased Tru Niagen consumer product sales and product cost savings initiatives.
Operating expenses increased by $6.8 million to $19.4 million in Q3 2021, compared to $12.7 million in Q3 2020. The increase in operating expenses was driven by $2.0 million of higher selling and marketing expenses and a $4.6 million increase in general and administrative expense. The increase in general and administrative expense was primarily driven by $3.7 million of higher legal expense.
The net loss for Q3 2021 was $(8.9) million or $(0.13) per share as reported compared to a net loss of $(4.2) million or $(0.07) per share for Q3 2020 as reported. Adjusted EBITDA excluding total legal expense, a non-GAAP measure, was a loss of $(0.6) million for Q3 2021, compared to a loss of $(0.1) million for Q3 2020, a $0.5 million decline. See "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of non-GAAP Adjusted EBITDA excluding total legal expense to net loss, the most directly comparable GAAP measure.
For Q3 2021, the net cash outflow from operating activities was $(5.9) million, compared to $(3.8) million in Q3 2020.
2021 Full Year Outlook
Looking forward, for the full year, the Company expects continued, steady revenue growth driven by its global e-commerce business, as well as growth with existing and new strategic partners. The Company expects slightly better than 60% gross margin and slightly higher general and administrative expense, excluding severance, restructuring and legal expense, for full year 2021. The Company plans to increase investments and resources to drive brand awareness and accelerate its research and development pipeline to capitalize on growth in the nicotinamide adenine dinucleotide (NAD+) market globally. Accordingly, the Company expects higher research and development expense and higher selling and marketing expense as a percentage of net sales year-over-year.
Investor Conference Call
A live webcast will be held Wednesday, November 3, 2021 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 http chromadex.com. The toll-free dial-in information for this call is 1-888-510-2008 with Conference ID 4126168.
The webcast will be recorded, and will be available for replay via the website from 7 30 p.m. Eastern time on November 3, 2021 to 11 59 p.m. Eastern time on November 10, 2021. The replay of the call can also be accessed by dialing 800-770-2030, using the Replay ID 4126168.
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" or the negative of such terms or other similar expressions. Such statements include the quotation from ChromaDex's Chief Executive Officer, and statements related to the company's 2021 financial outlook. More detailed information about ChromaDex and the risk factors that may affect the realization of forward-looking statements is set forth in ChromaDex's Annual Report on Form 10-K for the fiscal year ended December 31, 2020, ChromaDex's Quarterly Reports on Form 10-Q and other filings submitted by ChromaDex to the SEC, copies of which may be obtained from the SEC's website at www.sec.gov. 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.
| Investor Relations | Media Relations |
| Brianna Gerber | Alex Worsham |
| Vice President of Finance and Investor Relations | Vice President of Global Marketing Communications |
| 949-419-0288 ext. 127 | 310-388-6706 ext. 689 |
| briannag chromadex.com | alexw chromadex.com |
ChromaDex Corporation and Subsidiaries
Unaudited Condensed Consolidated Statements of Operations
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| (In thousands, except per share data) | |||||||||||||||
| Sales, net | $ | 17,308 | $ | 14,180 | $ | 49,690 | $ | 43,812 | |||||||
| Cost of sales | 6,730 | 5,726 | 19,068 | 17,959 | |||||||||||
| Gross profit | 10,578 | 8,454 | 30,622 | 25,853 | |||||||||||
| Operating expenses | |||||||||||||||
| Sales and marketing | 7,221 | 5,223 | 19,711 | 14,629 | |||||||||||
| Research and development | 996 | 841 | 2,787 | 2,545 | |||||||||||
| General and administrative | 11,202 | 6,586 | 29,881 | 22,452 | |||||||||||
| Total operating expenses | 19,419 | 12,650 | 52,379 | 39,626 | |||||||||||
| Operating loss | (8,841) | (4,196) | (21,757) | (13,773) | |||||||||||
| Interest expense, net | (15) | (19) | (46) | (55) | |||||||||||
| Net loss | $ | (8,856) | $ | (4,215) | $ | (21,803) | $ | (13,828) | |||||||
| Basic and diluted loss per share attributable to common stockholders | $ | (0.13) | $ | (0.07) | $ | (0.33) | $ | (0.23) | |||||||
| Basic and diluted weighted average common shares outstanding | 68,236 | 61,695 | 66,811 | 60,797 |
See Notes to Consolidated Financial Statements in Part I Item 1 of ChromaDex's Quarterly Report on Form 10-Q to be filed with Securities and Exchange Commission on November 3, 2021.
ChromaDex Corporation and Subsidiaries
Unaudited Condensed Consolidated Balance Sheets
| Sep 30, 2021 | Dec 31, 2020 | ||||||
| (In thousands except par values, unless otherwise indicated) | |||||||
| Assets | |||||||
| Current assets | |||||||
| Cash, including restricted cash of $0.2 million for both periods | $ | 33,102 | $ | 16,697 | |||
| Trade receivables, net of allowances of $37 and $189, respectively Including receivables from Related Party of $2.3 million and $0.9 million, respectively. | 5,295 | 2,694 | |||||
| Inventories | 12,676 | 11,683 | |||||
| Prepaid expenses and other assets | 1,762 | 1,145 | |||||
| Total current assets | 52,835 | 32,219 | |||||
| Leasehold improvements and equipment, net | 3,084 | 3,206 | |||||
| Intangible assets, net | 908 | 1,082 | |||||
| Right-of-use assets | 3,049 | 1,226 | |||||
| Other long-term assets | 576 | 625 | |||||
| Total assets | $ | 60,452 | $ | 38,358 | |||
| Liabilities and Stockholders' Equity | |||||||
| Current liabilities | |||||||
| Accounts payable | $ | 10,804 | $ | 9,445 | |||
| Accrued expenses | 6,331 | 6,133 | |||||
| Current maturities of operating lease obligations | 447 | 589 | |||||
| Current maturities of finance lease obligations | 13 | 31 | |||||
| Customer deposits | 175 | 278 | |||||
| Total current liabilities | 17,770 | 16,476 | |||||
| Deferred revenue | 4,346 | 4,441 | |||||
| Operating lease obligations, less current maturities | 2,876 | 997 | |||||
| Finance lease obligations, less current maturities | 11 | 20 | |||||
| Total liabilities | 25,003 | 21,934 | |||||
| Commitments and Contingencies | |||||||
| Equity | |||||||
| ChromaDex Corporation and subsidiaries stockholders' equity | |||||||
| Common stock, $0.001 par value authorized 150,000 shares 68,094 shares and 61,881 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively. | 68 | 62 | |||||
| Additional paid-in capital | 199,011 | 158,190 | |||||
| Accumulated deficit | (163,628) | (141,825) | |||||
| Cumulative translation adjustments | (2) | (3) | |||||
| Total stockholders' equity | 35,449 | 16,424 | |||||
| Total liabilities and stockholders' equity | $ | 60,452 | $ | 38,358 |
See Notes to Consolidated Financial Statements in Part I Item 1 of ChromaDex's Quarterly Report on Form 10-Q to be filed with Securities and Exchange Commission on November 3, 2021.
ChromaDex Corporation and Subsidiaries
Unaudited Reconciliation of Non-GAAP Financial Measures
| Adjusted EBITDA | |||||||||||||||||||
| Q3 2021 | Q2 2021 | Q1 2021 | Q4 2020 | Q3 2020 | |||||||||||||||
| (In thousands) | |||||||||||||||||||
| Net loss, as reported | $ | (8,856) | $ | (5,566) | $ | (7,381) | $ | (6,097) | $ | (4,215) | |||||||||
| Adjustments | |||||||||||||||||||
| Interest expense, net | 15 | 12 | 19 | 16 | 19 | ||||||||||||||
| Depreciation | 232 | 226 | 221 | 219 | 220 | ||||||||||||||
| Amortization of intangibles | 53 | 61 | 60 | 61 | 60 | ||||||||||||||
| Amortization of right of use assets | 131 | 128 | 126 | 115 | 97 | ||||||||||||||
| Share-based compensation | 1,822 | 1,616 | 1,284 | 1,778 | 1,574 | ||||||||||||||
| Severance and restructuring | 342 | 13 | (10) | 329 | 224 | ||||||||||||||
| Adjusted EBITDA | $ | (6,261) | $ | (3,510) | $ | (5,681) | $ | (3,579) | $ | (2,021) | |||||||||
| Total legal expense | 5,640 | 4,150 | 5,010 | 2,468 | 1,896 | ||||||||||||||
| Adjusted EBITDA excluding total legal expense | $ | (621) | $ | 640 | $ | (671) | $ | (1,111) | $ | (125) |
Non-GAAP Financial Information
ChromaDex discloses adjusted EBITDA excluding (a) interest, (b) depreciation, (c) amortization, (d) non-cash share-based compensation costs, (e) severance and restructuring expense and (f) total legal expense. ChromaDex uses this non-GAAP measure when evaluating its financial results as well as for internal resource management, planning and forecasting purposes. ChromaDex believes the presentation of its 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 adjusted EBITDA has substance because the excluded expenses are infrequent in nature, are variable in nature or do not represent current cash expenditures. Non-GAAP measures should not be viewed in isolation from or as a substitute for ChromaDex's financial results in accordance with GAAP.