Full Press Release Details
Health Announces Second Quarter 2022 Financial Results
Increase for Eighth Consecutive Quarter
for Second Quarter 2022:
| Record revenues of $23.3 million, up 29% over $18.1 million for the prior-year quarter | ||
| Record gross profit of $16.8 million, up 22% over $13.7 million for the prior-year quarter | ||
| A record 718,000 product units shipped, up 4% from the prior-year quarter | ||
| Cash and cash equivalents of $46.4 million as of June 30, 2022 |
Tenn., August 9, 2022 - Harrow Health, Inc. (NASDAQ: HROW), an eyecare pharmaceutical company focused on the development, production,
sale, and distribution of innovative ophthalmic prescription medicines, today announced results for the second quarter ended June 30,
2022. The Company also posted its second quarter Letter to Stockholders and corporate presentation to the "Investors"
section of its website, harrowinc.com.
are pleased with both our financial and operational performance during the second quarter of 2022," said Mark L. Baum, CEO of Harrow
Health. "The second quarter was our eighth consecutive quarter of record results in many of the financial metrics that we track,
including total revenues, revenue per shipping day, and total number of product units distributed. From an operational perspective, during
the quarter, we continued to focus on ensuring that the Harrow eyecare platform has the infrastructure, systems, resources, and talent
needed to execute on the growth that we expect in our compounded pharmaceutical business and new and even more dramatic growth we expect
from the continued integration of FDA-approved branded pharmaceutical products into the Harrow platform.
business remains strong, and we believe the second half of 2022 will be a very consequential period for Harrow. We expect several milestone
events during the second half, including the PDUFA target action date for AMP-100, a patented ocular surface anesthetic drug candidate,
as well as several product launches of compounded formulations. In addition, we continue to be hard at work trying to close transactions,
which are at various stages of completion, that we strongly believe will add value to our company in several important ways."
quarter figures of merit:
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Net revenues | $ | 23,323,000 | $ | 18,134,000 | $ | 45,443,000 | $ | 33,577,000 | ||||||||
| Gross margin | 72 | % | 76 | % | 73 | % | 76 | % | ||||||||
| Core gross margin (1) | 73 | % | 76 | % | 74 | % | 76 | % | ||||||||
| Net loss | (6,239,000 | ) | (2,950,000 | ) | (8,677,000 | ) | (2,733,000 | ) | ||||||||
| Core net income (1) | 254,000 | 2,087,000 | 967,000 | 4,531,000 | ||||||||||||
| Adjusted EBITDA (1) | 4,505,000 | 5,698,000 | 9,445,000 | 9,974,000 | ||||||||||||
| Diluted net loss per share | (0.23 | ) | (0.11 | ) | (0.32 | ) | (0.10 | ) | ||||||||
| Core diluted net income per share (1) | 0.01 | 0.07 | 0.04 | 0.16 |
| HROW Announces Second Quarter 2022 Financial Results |
| Page 2 |
| August 9, 2022 |
Company's management team will host a conference call and live webcast today at 4:45 p.m. Eastern Time to discuss the second quarter
results and provide a business update. To participate in the call, see details below:
| Conference Call Details: | ||
| Date: | Tuesday, August 9, 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 8466369): (telephonic replay through August 16, 2022) | 1-877-344-7529 (U.S.) 1-412-317-0088 (International) | |
| Webcast: (online replay through November 9, 2022) | harrowinc.com |
Health, Inc. (Nasdaq: HROW) is an eyecare pharmaceutical company focused on the development, production, sale, and distribution of innovative
ophthalmic prescription medications that are accessible and affordable. 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
| HROW Announces Second Quarter 2022 Financial Results |
| Page 3 |
| August 9, 2022 |
CONSOLIDATED BALANCE SHEETS
| June 30, 2022 | December 31, 2021 | |||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| Cash and cash equivalents | $ | 46,438,000 | $ | 42,167,000 | ||||
| All other current assets | 18,265,000 | 18,495,000 | ||||||
| Total current assets | 64,703,000 | 60,662,000 | ||||||
| All other assets | 33,359,000 | 37,667,000 | ||||||
| TOTAL ASSETS | $ | 98,062,000 | $ | 98,329,000 | ||||
| LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
| Current liabilities | $ | 12,922,000 | $ | 9,722,000 | ||||
| Senior April 2026 Notes, net of discount | 72,042,000 | 71,654,000 | ||||||
| All other liabilities | 7,704,000 | 6,022,000 | ||||||
| TOTAL LIABILITIES | 92,668,000 | 87,398,000 | ||||||
| TOTAL STOCKHOLDERS' EQUITY | 5,394,000 | 10,931,000 | ||||||
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 98,062,000 | $ | 98,329,000 |
| HROW Announces Second Quarter 2022 Financial Results |
| Page 4 |
| August 9, 2022 |
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| For the Three Months Ended June 30, | For the Six Months Ended June 30, | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| Total revenues | $ | 23,323,000 | $ | 18,134,000 | $ | 45,443,000 | $ | 33,577,000 | ||||||||
| Cost of sales | 6,534,000 | 4,417,000 | 12,497,000 | 8,187,000 | ||||||||||||
| Gross profit | 16,789,000 | 13,717,000 | 32,946,000 | 25,390,000 | ||||||||||||
| Selling, general and administrative | 14,185,000 | 9,123,000 | 27,583,000 | 17,287,000 | ||||||||||||
| Research and development | 914,000 | 425,000 | 1,572,000 | 1,017,000 | ||||||||||||
| Total operating expenses | 15,099,000 | 9,548,000 | 29,155,000 | 18,304,000 | ||||||||||||
| Income from operations | 1,690,000 | 4,169,000 | 3,791,000 | 7,086,000 | ||||||||||||
| Total other expense, net | 7,889,000 | 6,647,000 | 12,428,000 | 9,347,000 | ||||||||||||
| Income taxes | 40,000 | - | 40,000 | - | ||||||||||||
| Net loss attributable to Harrow Health, Inc. | (6,239,000 | ) | (2,478,000 | ) | (8,677,000 | ) | (2,261,000 | ) | ||||||||
| Preferred dividends and accretion of preferred stock discount | - | (472,000 | ) | - | (472,000 | ) | ||||||||||
| Net loss attributable to Harrow Health, Inc. common stockholders | $ | (6,239,000 | ) | $ | (2,950,000 | ) | $ | (8,677,000 | ) | $ | (2,733,000 | ) | ||||
| Net loss per share of common stock, basic and diluted | $ | (0.23 | ) | $ | (0.11 | ) | $ | (0.32 | ) | $ | (0.10 | ) |
| HROW Announces Second Quarter 2022 Financial Results |
| Page 5 |
| August 9, 2022 |
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
| For the Six Months Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| Net cash provided by (used in): | ||||||||
| Operating activities | $ | 5,827,000 | $ | 8,648,000 | ||||
| Investing activities | (669,000 | ) | 8,445,000 | |||||
| Financing activities | (887,000 | ) | 51,457,000 | |||||
| Net change in cash and cash equivalents | 4,271,000 | 68,550,000 | ||||||
| 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 | $ | 46,438,000 | $ | 72,851,000 |
| HROW Announces Second Quarter 2022 Financial Results |
| Page 6 |
| August 9, 2022 |
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, provide 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 June 30, 2022, and for the same period in 2021:
OF NET (LOSS) INCOME TO ADJUSTED EBITDA
| For the Three Months Ended June 30, | ||||||||
| 2022 | 2021 | |||||||
| GAAP net (loss) income | $ | (6,239,000 | ) | $ | (2,478,000 | ) | ||
| Stock-based compensation and expenses | 1,993,000 | 1,078,000 | ||||||
| Interest expense, net | 1,794,000 | 1,314,000 | ||||||
| Income taxes | 40,000 | - | ||||||
| Depreciation and amortization | 424,000 | 412,000 | ||||||
| Amortization of intangible assets | 398,000 | 39,000 | ||||||
| Investment loss, net | 6,095,000 | 4,526,000 | ||||||
| Other expense, net | - | 807,000 | (1) | |||||
| Adjusted EBITDA | $ | 4,505,000 | $ | 5,698,000 |
| HROW Announces Second Quarter 2022 Financial Results |
| Page 7 |
| August 9, 2022 |
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"), preferred stock dividends, 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 and six months ended
June 30, 2022, and for the same period in 2021:
| For the Three Months Ended June 30, 2022 | ||||||||||||||||
| GAAP Results | Amortization of Certain Intangible Assets | Investment Losses | Core Results | |||||||||||||
| Gross profit | $ | 16,789,000 | $ | 341,000 | $ | - | $ | 17,130,000 | ||||||||
| Gross margin | 72 | % | 73 | % | ||||||||||||
| Operating income | 1,690,000 | 398,000 | - | 2,088,000 | ||||||||||||
| (Loss) income before taxes | (6,199,000 | ) | 398,000 | 6,095,000 | 294,000 | |||||||||||
| Taxes | (40,000 | ) | - | - | (40,000 | ) | ||||||||||
| Net (loss) income | (6,239,000 | ) | 398,000 | 6,095,000 | 254,000 | |||||||||||
| Basic (loss) earnings per share ($) (1) | (0.23 | ) | 0.01 | |||||||||||||
| Diluted (loss) earnings per share ($) (1) | (0.23 | ) | 0.01 | |||||||||||||
| Weighted average number of shares of common stock outstanding, basic | 27,303,458 | 27,303,458 | ||||||||||||||
| Weighted average number of shares of common stock outstanding, diluted | 27,303,458 | 28,234,177 |
| For the Six Months Ended June 30, 2022 | ||||||||||||||||
| GAAP Results | Amortization of Certain Intangible Assets | Investment Losses | Core Results | |||||||||||||
| Gross profit | $ | 32,946,000 | $ | 682,000 | $ | - | $ | 33,628,000 | ||||||||
| Gross margin | 73 | % | 74 | % | ||||||||||||
| Operating income | 3,791,000 | 802,000 | - | 4,593,000 | ||||||||||||
| (Loss) Income before taxes | (8,637,000 | ) | 802,000 | 8,842,000 | 1,007,000 | |||||||||||
| Taxes | (40,000 | ) | - | - | (40,000 | ) | ||||||||||
| Net (loss) income | (8,677,000 | ) | 802,000 | 8,842,000 | 967,000 | |||||||||||
| Basic (loss) earnings per share ($) (1) | (0.32 | ) | 0.04 | |||||||||||||
| Diluted (loss) earnings per share ($) (1) | (0.32 | ) | 0.03 | |||||||||||||
| Weighted average number of shares of common stock outstanding, basic | 27,265,350 | 27,265,350 | ||||||||||||||
| Weighted average number of shares of common stock outstanding, diluted | 27,265,350 | 28,270,639 |
| HROW Announces Second Quarter 2022 Financial Results |
| Page 8 |
| August 9, 2022 |
| For the Three Months Ended June 30, 2021 | ||||||||||||||||||||
| GAAP Results | Amortization of Certain Intangible Assets | Investment Losses | Other Items | Core Results | ||||||||||||||||
| Gross profit | $ | 13,717,000 | $ | - | $ | - | $ | - | $ | 13,717,000 | ||||||||||
| Gross margin | 76 | % | - | 76 | % | |||||||||||||||
| Operating income | 4,169,000 | 39,000 | - | - | 4,208,000 | |||||||||||||||
| (Loss) income before taxes | (2,478,000 | ) | 39,000 | 4,526,000 | - | 2,087,000 | ||||||||||||||
| Taxes | - | - | - | - | - | |||||||||||||||
| Net (loss) income attributable to common stockholders | (2,950,000 | ) | 39,000 | 4,526,000 | 472,000 | 2,087,000 | ||||||||||||||
| Basic (loss) earnings per share ($) (1) | (0.11 | ) | 0.06 | |||||||||||||||||
| Diluted (loss) earnings per share ($) (1) | (0.11 | ) | 0.07 | |||||||||||||||||
| Weighted average number of shares of common stock outstanding, basic | 26,736,970 | 26,736,970 | ||||||||||||||||||
| Weighted average number of shares of common stock outstanding, diluted | 26,736,970 | 28,309,490 |
| For the Six Months Ended June 30, 2021 | ||||||||||||||||||||
| GAAP Results | Amortization of Certain Intangible Assets | Investment Losses | Other Items | Core Results | ||||||||||||||||
| Gross profit | $ | 25,390,000 | $ | - | $ | - | $ | - | $ | 25,390,000 | ||||||||||
| Gross margin | 76 | % | 76 | % | ||||||||||||||||
| Operating income | 7,086,000 | 79,000 | - | - | 7,165,000 | |||||||||||||||
| (Loss) Income before taxes | (2,261,000 | ) | 79,000 | 6,713,000 | - | 4,531,000 | ||||||||||||||
| Taxes | - | - | - | - | - | |||||||||||||||
| Net (loss) income attributable to common stockholders | (2,733,000 | ) | 79,000 | 6,713,000 | 472,000 | 4,531,000 | ||||||||||||||
| Basic (loss) earnings per share ($) (1) | (0.10 | ) | 0.15 | |||||||||||||||||
| Diluted (loss) earnings per share ($) (1) | (0.10 | ) | 0.16 | |||||||||||||||||
| Weighted average number of shares of common stock outstanding, basic | 26,379,943 | 26,379,943 | ||||||||||||||||||
| Weighted average number of shares of common stock outstanding, diluted | 26,379,943 | 27,914,254 |