On May 12, 2022 ChromaDex Corp. (NASDAQ:CDXC) reported financial results for the first quarter of 2022 (Press release, ChromaDex, MAY 12, 2022, View Source [SID1234614470]).
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First Quarter 2022 and Recent Highlights
Total net sales were $17.3 million, up 18% from the prior year quarter.
Tru Niagen net sales were $14.9 million, a 20% increase from the prior year quarter.
In April 2022, the ChromaDex External Research Program (CERP) achieved its 250th material transfer agreement since 2013, resulting in over 100 peer-reviewed preclinical and clinical studies, many including the study of Niagen and its impact on healthy aging.
Clinical study published in Cell Metabolism revealed NR as a potential neuroprotective therapy for Parkinson’s Disease (PD) patients, warranting further investigation in additional trials. Two additional studies are underway, including a 400 patient study at 1,000 milligrams per day, and a 20 patient study at 3,000 milligrams per day.
Launched new consumer product, Tru Niagen Immune, a first-of-its kind combination of immune-boosting nutrition with ChromaDex’s proprietary NAD+ boosting ingredient Niagen, beginning April 2022.
Granted additional U.S. continuation patent to protect the novel manufacturing process of NR and its various salt forms, which now cover NR Chloride, NR Malate, and NR Tartrate salts, through 2037.
"We delivered solid financial results in the first quarter, while strengthening our patent portfolio, and announcing dramatic new scientific research on Niagen(R)," said CEO, Rob Fried. "Following the quarter, we launched Tru Niagen(R) Immune and ramped up our new TV campaign to encouraging early results."
Results of operations for the three months ended March 31, 2022 compared to the prior year quarter
For the three months ended March 31, 2022 ("Q1 2022"), ChromaDex reported net sales of $17.3 million, up $2.6 million or 18% compared to the first quarter of 2021 ("Q1 2021"). The increase in Q1 2022 revenues was largely driven by growth in sales of Tru Niagen (primarily e-commerce) paired with slight growth in ingredient sales.
Gross margin percentage declined to 61.0% in Q1 2022 compared to 62.9% in Q1 2021 primarily due to business mix and increases in supply chain headcount to scale the business.
Operating expenses increased by $1.7 million to $18.3 million in Q1 2022, compared to $16.6 million in Q1 2021. The increase in operating expenses was driven by $2.0 million of higher selling and marketing expenses partially offset by a $0.6 million decrease in general and administrative expense. The increase in selling and marketing expenses are largely due to brand building activities, including new Tru Niagen television campaign.
The net loss for Q1 2022 was $7.7 million or $(0.11) per share compared to a net loss of $7.4 million or $(0.12) per share for Q1 2021. Adjusted EBITDA including legal expense, a non-GAAP measure, delivered a loss of $4.5 million for Q1 2022, a $1.2 million improvement from Q1 2021. Adjusted EBITDA excluding legal expense, a non-GAAP measure, was a loss of $2.1 million for Q1 2022. See "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of non-GAAP Adjusted EBITDA excluding legal expense to net loss, the most directly comparable GAAP measure.
For Q1 2022, the net cash outflow from operating activities was $7.2 million, compared to $5.4 million in Q1 2021 largely due to changes in working capital.
2022 Full Year Outlook
Looking forward, for the full year, the Company expects 15-20% revenue growth, driven by its global e-commerce business, as well as growth with existing and new strategic partners. The outlook does not include revenue upside from potential new partnerships in the pipeline. The outlook contemplates continued COVID-19 headwinds for international partners. The Company expects slightly better than 60% gross margin and a reduction in general and administrative expense of $5.0 to $6.0 million, as reported, for full year 2022, driven by lower legal expense. The Company expects 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 an increase in research and development expense of approximately $2.0 million. Selling and marketing expense is expected to be up in absolute dollars, but down slightly as a percentage of net sales, year-over-year.
Investor Conference Call
A live webcast will be held Thursday, May 12, 2022 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss ChromaDex’s first-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 View Source The toll-free dial-in information for this call is 1-888-330-2446 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 May 12, 2022 to 11:59 p.m. Eastern time on May 19, 2022. 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," "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, and statements related to the Company’s 2022 financial outlook including but not limited to revenue growth, gross margin, expenses, and investment plans. Other risks that contribute to the uncertain nature of the forward-looking statements include: the impact of the COVID-19 pandemic on our business and the global economy; our history of operating losses and need to obtain additional financing; the growth and profitability of our product sales; our ability to maintain sales, marketing and distribution capabilities; changing consumer perceptions of our products; our reliance on a single or limited number of third-party suppliers; 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.