Full Press Release Details
Health Announces First Quarter 2022 Financial Results
Consecutive Quarter of Record Results
for First Quarter 2022:
| Record revenues of $22.1 million, up 43% over $15.4 million for the prior-year quarter | ||
| Record gross profit of $16.2 million, up 38% over $11.7 million for the prior-year quarter | ||
| Record number of 689,000 product units shipped, up 72% from the prior-year quarter | ||
| Cash and cash equivalents of $42.0 million as of March 31, 2022 |
Tenn., May 5, 2022 - Harrow Health, Inc. (NASDAQ: HROW), an ophthalmic-focused healthcare company, today announced results for
the first quarter ended March 31, 2022. The Company also posted its first quarter Letter to Stockholders and corporate presentation
to the "Investors" section of its website, harrowinc.com.
first quarter financial and operational results, combined with our internal forecasts and the opportunities we are currently pursuing,
have validated our belief that 2022 would be a break-out' year for Harrow," said Mark L. Baum, CEO of Harrow Health.
"We had a tremendous start to 2022, continuing the momentum from 2021 and the consistent record-breaking quarters our team delivered.
Our first quarter results, reported today, represent our seventh consecutive quarter of record financial results, including a 43% increase
in year-over-year revenues and a nearly 10% increase from the sequential quarter.
see ongoing organic growth in our core business; and in addition to the other value drivers identified in our Letter to Stockholders
we published today, Harrow stockholders can count on our team being ready to launch AMP-100 as we approach a potential commercial launch
during the first half of 2023, assuming we receive FDA approval on our PDUFA target action date of October 16, 2022.
remain confident in Harrow's future as we implement our growth plan, build a profitable business, and serve our customers with
products and services that are being chosen by an ever-expanding group of leading U.S. ophthalmologists, optometrists, hospitals, and
ambulatory surgery centers, which has allowed us to continue to take an increasing share of the market for several large categories of
ophthalmic pharmaceutical products in the United States."
quarter figures of merit:
| For the Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Total revenues | $ | 22,120,000 | $ | 15,443,000 | ||||
| Gross margin | 73 | % | 76 | % | ||||
| Core gross margin (1) | 75 | % | 76 | % | ||||
| Net (loss) income | (2,438,000 | ) | 217,000 | |||||
| Core net income (1) | 713,000 | 2,444,000 | ||||||
| Adjusted EBITDA (1) | 4,940,000 | 4,276,000 | ||||||
| Diluted net (loss) income per share | (0.09 | ) | 0.01 | |||||
| Core diluted net income per share (1) | 0.03 | 0.09 |
Company's management team will host a conference call and live webcast today at 4:45 p.m. Eastern Time to discuss the results and
provide a business update. To participate in the call, see details below:
| Conference Call Details: | |
| Date: | Thursday, May 5, 2022 |
| Time: | 4:45 p.m. Eastern time |
| Participant Dial-in: | 1-833-953-2434 (U.S.) 1-412-317-5763 (International) |
| Replay Dial-in (Passcode 9985794): (telephonic replay through May 12, 2022) | 1-877-344-7529 (U.S.) 1-412-317-0088 (International) |
| Webcast: (online replay through August 5, 2022) | harrowinc.com |
Health, Inc. (NASDAQ: HROW) is an ophthalmic-focused healthcare company. The Company owns and operates ImprimisRx, one of the
nation's leading ophthalmology-focused pharmaceutical businesses, and Visionology, a direct-to-consumer eye care subsidiary
focused on chronic vision care. Harrow Health also holds non-controlling equity positions in Eton Pharmaceuticals, Surface
Ophthalmics and Melt Pharmaceuticals, all of which started as Harrow Health subsidiaries, and owns royalty rights in four
clinical-stage drug candidates being developed by Surface Ophthalmics and Melt Pharmaceuticals. For more information about Harrow Health,
please visit the Investors section of the corporate website, harrowinc.com.
press release contains "forward-looking statements" within the meaning of the U.S. Private Securities Litigation Reform Act
of 1995. Any statements in this release that are not historical facts may be considered such "forward-looking statements."
Forward-looking statements are based on management's current expectations and are subject to risks and uncertainties which may
cause results to differ materially and adversely from the statements contained herein. Some of the potential risks and uncertainties
that could cause actual results to differ from those predicted include the continued impact of the COVID-19 pandemic and any future health
epidemics on our financial condition, liquidity and results of operations; our ability to make commercially available our FDA-approved
products and compounded formulations and technologies in a timely manner or at all; market acceptance of the Company's products
and challenges related to the marketing of the Company's products; risks related to our pharmacy operations; our ability to enter
into other strategic alliances, including arrangements with pharmacies, physicians and healthcare organizations for the development and
distribution of our products; our ability to obtain intellectual property protection for our assets; our ability to accurately estimate
our expenses and cash burn, and raise additional funds when necessary; risks related to research and development activities; the projected
size of the potential market for our technologies and products; unexpected new data, safety and technical issues; regulatory and market
developments impacting compounding pharmacies, outsourcing facilities and the pharmaceutical industry; competition; and market conditions.
These and additional risks and uncertainties are more fully described in Harrow Health's filings with the Securities and Exchange
Commission, including its Annual Report on Form 10-K and its Quarterly Reports on Form 10-Q. Such documents may be read free of charge
on the SEC's web site at www.sec.gov. Undue reliance should not be placed on forward-looking statements, which speak only
as of the date they are made. Except as required by law, Harrow Health undertakes no obligation to update any forward-looking statements
to reflect new information, events or circumstances after the date they are made, or to reflect the occurrence of unanticipated events.
Webb, Director of Communications and Investor Relations
CONDENSED CONSOLIDATED BALANCE SHEETS
| March 31, 2022 (unaudited) | March 31, 2021 | |||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 41,948,000 | $ | 42,167,000 | ||||
| All other current assets | 20,367,000 | 18,495,000 | ||||||
| Total current assets | 62,315,000 | 60,662,000 | ||||||
| All other assets | 35,280,000 | 37,667,000 | ||||||
| TOTAL ASSETS | $ | 97,595,000 | $ | 98,329,000 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | 9,182,000 | 9,722,000 | ||||||
| Senior April 2026 Notes, net of discount | 71,847,000 | 71,654,000 | ||||||
| All other liabilities | 6,830,000 | 6,022,000 | ||||||
| TOTAL LIABILITIES | 87,859,000 | 87,398,000 | ||||||
| TOTAL STOCKHOLDERS' EQUITY | 9,736,000 | 10,931,000 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 97,595,000 | $ | 98,329,000 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| For the Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Total revenues | $ | 22,120,000 | $ | 15,443,000 | ||||
| Cost of sales | 5,963,000 | 3,770,000 | ||||||
| Gross profit | 16,157,000 | 11,673,000 | ||||||
| Selling, general and administrative | 13,398,000 | 8,164,000 | ||||||
| Research and development | 658,000 | 592,000 | ||||||
| Total operating expenses | 14,056,000 | 8,756,000 | ||||||
| Income from operations | 2,101,000 | 2,917,000 | ||||||
| Total other expense, net | 4,539,000 | 2,700,000 | ||||||
| Income taxes | - | - | ||||||
| Total net (loss) income | $ | (2,438,000 | ) | $ | 217,000 | |||
| Net (loss) income per share of common stock, basic | $ | (0.09 | ) | $ | 0.01 | |||
| Net (loss) income per share of common stock, diluted | $ | (0.09 | ) | $ | 0.01 |
INC. UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
| For the Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| Net cash provided by (used in): | ||||||||
| Operating activities | $ | 967,000 | $ | 3,208,000 | ||||
| Investing activities | (410,000 | ) | (224,000 | ) | ||||
| Financing activities | (776,000 | ) | (781,000 | ) | ||||
| Net change in cash and cash equivalents | (219,000 | ) | 2,203,000 | |||||
| Cash, cash equivalents and restricted cash at beginning of the period | 42,167,000 | 4,301,000 | ||||||
| Cash, cash equivalents and restricted cash at end of the year | $ | 41,948,000 | $ | 6,504,000 |
addition to the Company's results of operations determined in accordance with U.S. generally accepted accounting principles (GAAP),
which are presented and discussed above, management also utilizes Adjusted EBITDA and Core Results, unaudited financial measures that
are not calculated in accordance with GAAP, to evaluate the Company's financial results and performance and to plan and forecast
future periods. Adjusted EBITDA and Core Results are considered "non-GAAP" financial measures within the meaning of Regulation
G promulgated by the SEC. Management believes that these non-GAAP financial measures reflect an additional way of viewing aspects of
the Company's operations that, when viewed with GAAP results, provides a more complete understanding of the Company's results
of operations and the factors and trends affecting its business. Management believes Adjusted EBITDA and Core Results provide meaningful
supplemental information regarding the Company's performance because (i) they allow for greater transparency with respect to key
metrics used by management in its financial and operational decision-making; (ii) they exclude the impact of non-cash or, when specified,
non-recurring items that are not directly attributable to the Company's core operating performance and that may obscure trends
in the Company's core operating performance; and (iii) they are used by institutional investors and the analyst community to help
analyze the Company's results. However, Adjusted EBITDA, Core Results, and any other non-GAAP financial measures should be considered
as a supplement to, and not as a substitute for, or superior to, the corresponding measures calculated in accordance with GAAP. Further,
non-GAAP financial measures used by the Company and the way they are calculated may differ from the non-GAAP financial measures or the
calculations of the same non-GAAP financial measures used by other companies, including the Company's competitors.
Company defines Adjusted EBITDA as net (loss) income attributable to Harrow Health, Inc., excluding the effects of stock-based compensation
and expenses, interest, taxes, depreciation, amortization, investment loss, net, gain or forgiveness of debt, and, if any and when specified,
other non-recurring income or expense items. Management believes that the most directly comparable GAAP financial measure to Adjusted
EBITDA is net (loss) income attributable to Harrow Health, Inc. Adjusted EBITDA has limitations and should not be considered as an alternative
to gross profit or net (loss) income as a measure of operating performance or to net cash provided by (used in) operating, investing,
or financing activities as a measure of ability to meet cash needs.
following is a reconciliation of Adjusted EBITDA, a non-GAAP measure, to the most comparable GAAP measure, net (loss) income, for the
three months ended March 31, 2022, and for the same period in 2021:
OF NET (LOSS) INCOME TO ADJUSTED EBITDA
| For the Three Months Ended March 31, | ||||||||
| 2022 | 2021 | |||||||
| GAAP net (loss) income | $ | (2,438,000 | ) | $ | 217,000 | |||
| Stock-based compensation and expenses | 2,016,000 | 855,000 | ||||||
| Interest expense, net | 1,792,000 | 513,000 | ||||||
| Income taxes | - | - | ||||||
| Depreciation | 419,000 | 464,000 | ||||||
| Amortization of intangible assets | 404,000 | 40,000 | ||||||
| Investment loss, net | 2,747,000 | 4,154,000 | ||||||
| Gain on forgiveness of debt (1) | - | (1,967,000 | ) | |||||
| Adjusted EBITDA | $ | 4,940,000 | $ | 4,276,000 |
Health Core Results, including core gross margin, core net income, core operating income, core EPS (basic and diluted), and core operating
margin, exclude all amortization and impairment charges of intangible assets, excluding software development costs, net gains and losses
on investments and equity securities, including equity method gains and losses and equity valued at fair value through profit and loss
("FVPL"), and gains/losses on forgiveness of debt. In other periods, Core Results may also exclude fair value adjustments
of financial assets in the form of options to acquire a company carried at FVPL, obligations related to product recalls, certain acquisition
related items, the integration and divestment related income and expenses, divestment gains and losses, restructuring charges/releases
and related items, legal related items, gains/losses on early extinguishment of debt or debt modifications, impairments of property,
plant and equipment and software, as well as income and expense items that management deems exceptional and that are or are expected
to accumulate within the year to be over a $100,000 threshold.
following is a reconciliation of Core Results, a non-GAAP measure, to the most comparable GAAP measure for the three months ended March
31, 2022, and for the same period in 2021:
| For the Three Months Ended March 31, 2022 | ||||||||||||||||
| GAAP Results | Amortization of Certain Intangible Assets | Investment Losses | Core Results | |||||||||||||
| Gross profit | $ | 16,157,000 | $ | 341,000 | $ | - | $ | 16,498,000 | ||||||||
| Core gross margin | 73 | % | 75 | % | ||||||||||||
| Operating income | 2,101,000 | 404,000 | - | 2,505,000 | ||||||||||||
| (Loss) income before taxes | (2,438,000 | ) | 404,000 | 2,747,000 | 713,000 | |||||||||||
| Taxes | - | - | - | - | ||||||||||||
| Net (loss) income | (2,438,000 | ) | 404,000 | 2,747,000 | 713,000 | |||||||||||
| Basic EPS ($) (1) | (0.09 | ) | - | - | 0.03 | |||||||||||
| Diluted EPS ($) (1) | (0.09 | ) | - | - | 0.03 | |||||||||||
| Operating margin | 9 | % | - | - | 11 | % | ||||||||||
| Weighted average number of shares of common stock outstanding, basic | 27,226,819 | - | - | 27,226,819 | ||||||||||||
| Weighted average number of shares of common stock outstanding, diluted | 27,226,819 | - | - | 28,317,740 |
| For the Three Months Ended March 31, 2021 | ||||||||||||||||||||
| GAAP Results | Amortization of Certain Intangible Assets | Investment Losses | Gain on Forgiveness of Debt | Core Results | ||||||||||||||||
| Gross profit | $ | 11,673,000 | $ | - | $ | - | $ | - | $ | 11,673,000 | ||||||||||
| Gross margin | 76 | % | - | - | - | 76 | % | |||||||||||||
| Operating income | 2,917,000 | 40,000 | - | - | 2,957,000 | |||||||||||||||
| (Loss) income before taxes | 217,000 | 40,000 | 4,154,000 | (1,967,000 | ) | 2,444,000 | ||||||||||||||
| Taxes | - | - | - | - | - | |||||||||||||||
| Net (loss) income | 217,000 | 40,000 | 4,154,000 | (1,967,000 | ) | 2,444,000 | ||||||||||||||
| Basic EPS ($) (1) | 0.01 | - | - | 0.09 | ||||||||||||||||
| Diluted EPS ($) (1) | 0.01 | - | - | 0.09 | ||||||||||||||||
| Operating margin | 19 | % | - | - | 19 | % | ||||||||||||||
| Weighted average number of shares of common stock outstanding, basic | 26,019,255 | - | - | 26,019,255 | ||||||||||||||||
| Weighted average number of shares of common stock outstanding, diluted | 27,480,622 | - | - | 27,480,622 |