On November 3, 2021 ChromaDex Corp. (NASDAQ:CDXC) reported financial results for the third quarter of 2021 (Press release, ChromaDex, NOV 3, 2021, View Source [SID1234594217]).

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Third Quarter 2021 and Recent Highlights

Total net sales were $17.3 million, up 22% from the prior year quarter.
Tru Niagen net sales were $14.8 million, a 24% increase from the prior year quarter.
Gross margin was 61.1%, a 150 basis point increase from the prior year quarter.
Net loss was $(8.9) million or $(0.13) per share, a decline of $0.06 per share from the prior year quarter.
Adjusted EBITDA excluding total legal expense, a non-GAAP measure, was a loss of $(0.6) million, a $0.5 million decline from the prior year quarter.
Announced partnership with Sinopharm Xingsha, a subsidiary of one of China’s largest pharmaceutical companies, to conduct cross-border sales of Tru Niagen in Mainland China, and collaborate to secure Health Food Registration.
Study published in September 2021 on nicotinamide riboside (NR) supplementation in children with Ataxia-Telangiectasia (AT), a prematurely aging population, showed improvement in ataxia scores and increased antibodies in immune-compromised patients.
Clinical study published in October 2021 in Molecular Systems Biology finds nutritional protocol including nicotinamide riboside (NR) significantly decreases liver fat and improves liver function.
"This quarter marks an inflection point for ChromaDex," said CEO, Rob Fried. "With the litigation largely behind us, we are focusing more resources, both human and financial, on building the Tru Niagen brand, furthering our science, and developing our global partnerships. We recently partnered with Sinopharm Xingsha, one of the most prestigious healthcare companies in China, which will enable us to capitalize on the tremendous opportunity for Tru Niagen in that market."

Results of operations for the three months ended September 30, 2021

For the three months ended September 30, 2021 ("Q3 2021"), ChromaDex reported net sales of $17.3 million, up $3.1 million or 22% compared to the third quarter of 2020 ("Q3 2020"). The increase in Q3 2021 revenues was largely driven by growth in sales of Tru Niagen paired with slight growth in Niagen and other ingredient sales.

Gross margin percentage improved by 150 basis points to 61.1% in Q3 2021 compared to 59.6% in Q3 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 $6.8 million to $19.4 million in Q3 2021, compared to $12.7 million in Q3 2020. The increase in operating expenses was driven by $2.0 million of higher selling and marketing expenses and a $4.6 million increase in general and administrative expense. The increase in general and administrative expense was primarily driven by $3.7 million of higher legal expense.

The net loss for Q3 2021 was $(8.9) million or $(0.13) per share as reported compared to a net loss of $(4.2) million or $(0.07) per share for Q3 2020 as reported. Adjusted EBITDA excluding total legal expense, a non-GAAP measure, was a loss of $(0.6) million for Q3 2021, compared to a loss of $(0.1) million for Q3 2020, a $0.5 million decline. See "Reconciliation of Non-GAAP Financial Measures" for a reconciliation of non-GAAP Adjusted EBITDA excluding total legal expense to net loss, the most directly comparable GAAP measure.

For Q3 2021, the net cash outflow from operating activities was $(5.9) million, compared to $(3.8) million in Q3 2020.

2021 Full Year Outlook

Looking forward, for the full year, the Company expects continued, steady revenue growth driven by its global e-commerce business, as well as growth with existing and new strategic partners. The Company expects slightly better than 60% gross margin and slightly higher general and administrative expense, excluding severance, restructuring and legal expense, for full year 2021. The Company plans 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 higher research and development expense and higher selling and marketing expense as a percentage of net sales year-over-year.

Investor Conference Call

A live webcast will be held Wednesday, November 3, 2021 at 4:30 p.m. Eastern time (1:30 p.m. Pacific time) to discuss ChromaDex’s third-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 1-888-510-2008 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 November 3, 2021 to 11:59 p.m. Eastern time on November 10, 2021. The replay of the call can also be accessed by dialing 800-770-2030, using the Replay ID: 4126168.