Exhibit 99.1
CHROMADEX CORPORATION REPORTS SECOND QUARTER 2020 FINANCIAL
RESULTS
Second Quarter 2020 Highlights vs. Second Quarter 2019
●
Strong growth in net sales to $15.3 million, higher gross margins,
and significantly improved marketing efficiency
year-over-year.
●
Tru Niagen net sales of $11.7 million, a 34% increase
year-over-year.
●
Net loss was ($3.7) million or ($0.06) per share, an improvement of
$0.08 per share year over year. Adjusted EBITDA excluding total
legal expense, a non-GAAP measure, was a profit of $0.5 million, a
$2.6 million improvement year-over-year.
●
Signed
200th
material
transfer agreement through ChromaDex External Research Program
(CERP), which has resulted in 60 published studies to date,
including 10 published clinical studies, on
Niagen®.
●
The study for the
200th
agreement,
announced last month, will assess the impact of Niagen® in
COVID-19 animal models in collaboration with the National Institute
of Allergy and Infectious Diseases (NIAID), a division of the
National Institutes of Health (NIH).
LOS ANGELES, August 6, 2020 (BUSINESS WIRE) - ChromaDex Corp. (NASDAQ:CDXC)
today
reported second quarter 2020 financial results.
“We
achieved record net sales of $15.3 million in the second quarter
while maintaining our focus on the science, announcing our
200th
research agreement and tenth published human trial on
Niagen®,” says ChromaDex CEO Rob Fried. “Business
adjustments at the onset of the pandemic and continued marketing
efficiencies allowed us to reach a financial goal of positive
Adjusted EBITDA excluding total legal expenses.”
Results of operations for
the three months ended June 30, 2020
For the
three months ended June 30, 2020 (“Q2 2020”), ChromaDex
reported net sales of $15.3 million, up 38% compared to $11.1
million in the second quarter of 2019 ("Q2 2019"). The increase in
Q2 2020 revenues was driven by growth in sales of Tru Niagen
and Niagen ingredient
revenues.
Gross
margin increased by 310 basis points to 59.4% in Q2 2020 compared
to 56.3% in Q2 2019. The increase in gross margin was largely
driven by the positive impact of increased Tru Niagen consumer product sales and product
cost saving initiatives, including a benefit of approximately 110
basis points related to savings from prior year initiatives that
were recognized in Q2 2020.
Operating
expenses decreased by $0.7 million to $12.8 million in Q2 2020,
compared to $13.4 million in Q2 2019. The decrease in operating
expenses was driven by a decrease of $1.1 million in general and
administrative expense, and a decrease of $0.1 million of research
and development expense, partially offset by $0.7 million of higher
selling and marketing expense. The decrease in general and
administrative expense was driven by $1.1 million of lower legal
expenses.
The net
loss for Q2 2020 was ($3.7) million or ($0.06) per share compared
to a net loss of ($7.8) million or ($0.14) per share for Q2
2019.
Adjusted
EBITDA excluding total legal expense, a non-GAAP measure, was a
profit of $0.5 million for Q2 2020, compared to a loss of ($2.1)
million for Q2 2020, a $2.6 million improvement.
ChromaDex
defines Adjusted EBITDA excluding total legal expense as net income
or (loss) which is adjusted for interest, income tax, depreciation,
amortization, non-cash stock compensation costs, severance and
restructuring expense, bad debt expense related to Elysium Health
and total legal expense.
For Q2
2020, the net cash used in operating activities was ($1.6) million
versus ($9.0) million in Q2 2019.
2020 Outlook
Looking
forward, the impact of COVID-19 on revenues is difficult to predict
and the Company is managing expenses to mitigate the bottom-line
impact. The Company does not expect any supply chain disruption at
this time and, based on trends-to-date, expects continued revenue
growth this year. Based on the Company’s current financial
outlook, revenue growth will be driven by its U.S. ecommerce
business, new international market launches with its partners and
distributors, such as in the U.K. and Australia, new online
platforms, including Persona Nutrition, a Nestlé Health
Science company, and the Company’s new product, Tru
Niagen® Beauty. The Company expects continued gross
margin improvement driven by a higher mix of Tru Niagen®
sales, product design changes implemented in late 2019, and
additional supply chain cost savings initiatives in 2020. The
Company expects lower selling, marketing and advertising as well as
general and administrative expenses as a percentage of net sales
driven by strong growth from returning customers and scale on our
fixed overhead costs driven by organizational realignment
initiatives, as well as new systems and processes.
ChromaDex
management will host an investor conference call to discuss the
first quarter results and provide a general business update on
Thursday, August 6, at 4:30pm ET.
Participants
should call in at least 10 minutes prior to the call. The dial-in
information is as follows:
Date: Thurs., August 6, 2020
Time: 4:30
p.m. Eastern time (1:30 p.m. Pacific time)
Toll-free dial-in number: (833) 979-2703
International dial-in number: (236) 714-2223
Conference ID: 1563949
Webcast link: ChromaDex Second
Quarter 2020 Earnings Conference Call
The conference call will be broadcast live and available for
replay here and
via the investor relations section of the Company’s website
at www.chromadex.com.
A replay of the conference call will be available after 7:30
p.m. ET.
Toll-free
replay number: 800-585-8367
Replay ID: 1563949
The
earnings press release, and its accompanying financial exhibits,
will be available on the Investor Relations section of the Company
website, www.chromadex.com.
About Non-GAAP Financial Measures:
Adjusted
EBITDA excluding total legal expense excludes interest, income tax,
depreciation, amortization, non-cash share-based compensation
costs, severance and restructuring expense, bad debt expense
related to Elysium Health, and total legal expense.
ChromaDex used these non-GAAP measures 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 measures enhances the
overall understanding of the company’s historical financial
performance. These non-GAAP measures should not be viewed in
isolation from or as a substitute for ChromaDex’s financial
results in accordance with GAAP. Reconciliation of GAAP to non-GAAP
measures are attached to this press release.
About ChromaDex:
ChromaDex Corp. is a science-based integrated
nutraceutical company devoted to improving the way people
age. ChromaDex scientists partner with leading
universities and research institutions worldwide to discover,
develop and create solutions to deliver the full potential of NAD
and its impact on human health. Its flagship
ingredient, NIAGEN® nicotinamide
riboside, sold directly to consumers as TRU
NIAGEN®,
is backed with clinical and scientific research, as well as
extensive IP protection. TRU
NIAGEN® is
helping the world AGE BETTER®. ChromaDex
maintains a website at www.chromadex.com to
which ChromaDex regularly posts copies of its press releases as
well as additional and financial information about the
Company.
Important Note on Forward Looking Statements:
This
release contains forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section
21E of the Securities and Exchange Act of 1934, as amended. Because
such statements are subject to risks and uncertainties, actual
results may differ materially from those expressed or implied by
such forward-looking statements. Such statements include the
quotation from ChromaDex’s Chief Executive Officer, and
statements related to the impact of COVID-19 on revenues and supply
chain and ChromaDex’s management of expenses to mitigate the
bottom-line impact; future revenue growth being driven by
ChromaDex’s U.S. ecommerce business, new international
markets and online platforms, including Persona Nutrition, and new
product, Tru Niagen Beauty; the expectations of gross margin
improvement driven by a by a higher mix of Tru Niagen® sales,
product design changes implemented in late 2019, and additional
supply chain cost savings initiatives in 2020; and the expectations
of lower selling, marketing and advertising expenses and lower
general and administrative expenses as a percentage of net sales
driven by strong growth from returning customers and scale on fixed
overhead costs driven by organizational realignment initiatives, as
well as new systems and processes. Other risks that contribute to
the uncertain nature of the forward-looking statements are reported
in our most recent Quarterly Report on Form 10-Q and Annual Report
on Form 10-K, as amended, 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.
ChromaDex Investor Relations Contact:
Brianna
Gerber, Vice President of FP&A and Investor
Relations
949-419-0288 ext.
127
ChromaDex Media Contact:
Alex
Worsham, Senior Director of Global Corporate
Communications
310-388-6706
ext. 689
ChromaDex
Corporation
ChromaDex Corporation and Subsidiaries
Condensed Consolidated Statements of Operations
For the Three Month Periods Ended June 30, 2020 and June 30,
2019
(In thousands, except per share data)
|
|
Three Months
Ended
|
|
|
|
June 30,
2020
|
June
30,
2019
|
|
|
|
|
|
Sales,
net
|
$15,287
|
$11,101
|
|
Cost
of sales
|
6,199
|
4,847
|
|
|
|
|
|
Gross profit
|
9,088
|
6,254
|
|
|
|
|
|
Operating
expenses:
|
|
|
|
Sales
and marketing
|
4,959
|
4,308
|
|
Research
and development
|
942
|
1,069
|
|
General
and administrative
|
6,874
|
7,932
|
|
Other
|
-
|
125
|
|
Operating expenses
|
12,775
|
13,434
|
|
|
|
|
|
Operating loss
|
(3,687)
|
(7,180)
|
|
|
|
|
|
Nonoperating
expense:
|
|
|
|
Interest
expense, net
|
(24)
|
(575)
|
|
Nonoperating expense
|
(24)
|
(575)
|
|
|
|
|
|
Net loss
|
$(3,711)
|
$(7,755)
|
|
|
|
|
|
Basic
and diluted loss per common share
|
$(0.06)
|
$(0.14)
|
|
|
|
|
|
Basic
and diluted weighted average
|
|
|
|
common
shares outstanding
|
60,906
|
55,539
|
|
|
|
|
See Notes to Consolidated Financial Statements in Part I of
ChromaDex's Quarterly Report
on Form 10-Q filed with Securities and Exchange Commission on
August 6, 2020.
ChromaDex Corporation and Subsidiaries
Condensed Consolidated Balance Sheets
June 30, 2020 and December 31, 2019
(In thousands, except per share data)
|
|
Jun. 30,
2020
|
Dec.
31,
2019
|
|
Assets
|
|
|
|
|
|
|
|
Current
Assets
|
|
|
|
Cash,
including restricted cash of $0.2 million and $0.2 million,
respectively
|
$18,890
|
$18,812
|
|
Trade
receivables, net of allowances of $0.0 million and $2.8 million,
respectively;
|
|
|
|
Receivables
from Related Party: $1.1 million and $0.8 million,
respectively
|
3,954
|
2,175
|
|
Inventories
|
12,338
|
11,535
|
|
Prepaid
expenses and other assets
|
584
|
996
|
|
Total current assets
|
35,766
|
33,518
|
|
|
|
|
|
Leasehold
Improvements and Equipment, net
|
3,487
|
3,765
|
|
Intangible
Assets, net
|
1,189
|
1,311
|
|
Right
of Use Assets
|
705
|
891
|
|
Other
Long-term Assets
|
845
|
762
|
|
|
|
|
|
Total assets
|
$41,992
|
$40,247
|
|
|
|
|
|
Liabilities and Stockholders' Equity
|
|
|
|
|
|
|
|
Current
Liabilities
|
|
|
|
Accounts
payable
|
$9,780
|
$9,626
|
|
Accrued
expenses
|
5,246
|
4,415
|
|
Current
maturities of operating lease obligations
|
632
|
595
|
|
Current
maturities of finance lease obligations
|
134
|
258
|
|
Customer
deposits
|
250
|
169
|
|
Total current liabilities
|
16,042
|
15,063
|
|
|
|
|
|
Deferred
Revenue
|
3,820
|
3,873
|
|
Operating
Lease Obligations, Less Current Maturities
|
522
|
848
|
|
Finance
Lease Obligations, Less Current Maturities
|
27
|
18
|
|
|
|
|
|
Total liabilities
|
20,411
|
19,802
|
|
|
|
|
|
Commitments
and Contingencies
|
|
|
|
|
|
|
|
Stockholders'
Equity
|
|
|
|
Common
stock, $.001 par value; authorized 150,000 shares;
|
|
|
|
issued
and outstanding June 30, 2020 61,421 shares and
|
|
|
|
December
31, 2019 59,562 shares
|
61
|
60
|
|
Additional
paid-in capital
|
153,036
|
142,285
|
|
Accumulated
deficit
|
(131,513)
|
(121,900)
|
|
Cumulative
translation adjustments
|
(3)
|
-
|
|
Total stockholders' equity
|
21,581
|
20,445
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
$41,992
|
$40,247
|
|
|
|
|
See Notes to Consolidated Financial Statements in Part I of
ChromaDex's Quarterly Report
on Form 10-Q filed with Securities and Exchange Commission on
August 6, 2020.
ChromaDex Corporation and Subsidiaries
Reconciliation of Non-GAAP Financial Measures
|
Adjusted EBITDA
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Q1
2019
|
Q2
2019
|
Q3
2019
|
Q4
2019
|
Q1
2020
|
Q2 2020
|
|
(In
thousands)
|
|
|
|
|
|
|
|
Net
loss, as reported
|
$(8,337)
|
$(7,755)
|
$(7,202)
|
$(8,853)
|
$(5,902)
|
$(3,711)
|
|
Adjustments:
|
|
|
|
|
|
|
|
Interest
(income) expense
|
(35)
|
575
|
314
|
(7)
|
12
|
24
|
|
Depreciation
|
173
|
190
|
196
|
203
|
214
|
218
|
|
Amortization
of intangibles
|
61
|
61
|
62
|
62
|
62
|
60
|
|
Amortization
of right of use assets
|
138
|
141
|
144
|
92
|
92
|
95
|
|
Share-based
compensation
|
2,029
|
1,759
|
1,687
|
1,697
|
1,873
|
1,711
|
|
Severance
and restructuring
|
-
|
-
|
-
|
200
|
953
|
284
|
|
Elysium-related
bad debt expense
|
-
|
-
|
-
|
2,233
|
-
|
-
|
|
Adjusted
EBITDA
|
$(5,971)
|
$(5,029)
|
$(4,799)
|
$(4,373)
|
$(2,696)
|
$(1,319)
|
|
|
|
|
|
|
|
|
|
Total
legal expense
|
3,250
|
2,926
|
2,944
|
2,226
|
2,380
|
1,844
|
|
|
|
|
|
|
|
|
|
Adjusted
EBITDA excluding total legal expense
|
$(2,721)
|
$(2,103)
|
$(1,855)
|
$(2,147)
|
$(316)
|
$525
|
