On May 6, 2021 ChromaDex Corp. (NASDAQ:CDXC) reported first quarter 2021 financial results (Press release, ChromaDex, MAY 6, 2021, View Source [SID1234579340]).
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First Quarter 2021 and Recent Highlights
Total net sales of $14.7 million, up 2% from $14.3 million in the year ago quarter.
Tru Niagen net sales of $12.4 million, a 12% increase from the year ago quarter.
Gross margin of 62.9%, a 500 basis point increase from the year ago quarter.
Net loss was ($7.4) million or ($0.12) per share, down $0.02 per share year-over-year.
Adjusted EBITDA excluding total legal expense, a non-GAAP measure, was a loss of ($0.7) million, a $0.4 million decline year-over-year.
Announced retail distribution of Tru Niagen in Walmart stores across the United States beginning in June 2021.
Announced strategic supply agreement with Health & Happiness Group (H&H), a global leader in premium health, human and pet nutrition and personal care brands to sell Niagen in its exclusively formulated Swisse products.
Announced strategic supply agreement with Ro, a healthcare technology company, to sell Niagen in specially-formulated Roman products.
Appointed former Nestlé executive, Fadi Karam as Chief Marketing Officer.
Appointed Dr. David L. Katz, a globally recognized authority on lifestyle medicine, to the ChromaDex Scientific Advisory Board.
"This has been an incredible year for ChromaDex strategically," said ChromaDex CEO, Rob Fried. "We signed three important deals with Walmart, H&H, and Ro. We also strengthened our balance sheet with a $25 million capital raise and announced the results of exciting scientific research on Niagen. We had some short-term supply chain disruptions that impacted first quarter sales, but the long-term prospects look stronger than ever."
Results of operations for the three months ended March 31, 2021
For the three months ended March 31, 2021 ("Q1 2021"), ChromaDex reported net sales of $14.7 million, up 2% compared to $14.3 million in the first quarter of 2020 ("Q1 2020"). The increase in Q1 2021 revenues was driven by growth in sales of Tru Niagen, largely offset by lower Niagen and other ingredient sales.
Gross margin percentage improved by 500 basis points to 62.9% in Q1 2021 compared to 57.9% in Q1 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 $2.4 million to $16.6 million in Q1 2021, compared to $14.2 million in Q1 2020. The increase in operating expenses was driven by $1.8 million of higher selling and marketing expenses, and an increase of $0.7 million in general and administrative expense, partially offset by $0.1 million of lower research and development expense. The increase in general and administrative expense was driven by $2.6 million of higher legal expense, partially offset by $1.0 million of lower severance and restructuring expenses and $0.8 million of lower shares-based compensation expense.
The net loss for Q1 2021 was ($7.4) million or ($0.12) per share as reported compared to a net loss of ($5.9) million or ($0.10) per share for Q1 2020 as reported. Adjusted EBITDA excluding total legal expense, a non-GAAP measure, was a loss of ($0.7) million for Q1 2021, compared to a loss of ($0.3) million for Q1 2020, a $0.4 million decline.
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 Q1 2021, the net cash flow from operating activities was ($5.4) million, versus ($5.2) million in Q1 2020.
2021 Outlook
Looking forward, for the full year, the Company expects continued, steady revenue growth driven by its global ecommerce business, as well as growth with existing and new strategic partners, and that the growth rate will accelerate beginning in the second quarter. The Company expects continued gross margin improvement to slightly better than 60%, roughly flat R&D expense and slightly higher selling and marketing expense as a percentage of net sales year-over-year. The Company expects slightly higher general and administrative expense, excluding severance, restructuring and legal expense. The Company plans to increase investments and resources to drive brand awareness and accelerate its R&D pipeline to capitalize on growth in the NAD+ market globally.
Investor Conference Call
ChromaDex management will host an investor conference call to discuss the first quarter results and provide a general business update on Thurs., May 6, at 4:30 p.m. ET.
Participants should call in at least 10 minutes prior to the call. The dial-in information is as follows:
The earnings press release, and its accompanying financial exhibits, will be available on the Investor Relations section of the Company website, www.chromadex.com.