EX-99.1 2 ex99-1.htm PRESS RELEASE DATED MAY 10, 2018 Blueprint
 
Exhibit 99.1
 
CHROMADEX CORPORATION REPORTS FIRST QUARTER 2018 FINANCIAL RESULTS
 
-First Quarter 2018 Net Revenues Increased by 95% to $6.6 Million -
 
IRVINE, Calif., May 10, 2018 (GLOBE NEWSWIRE) - ChromaDex Corporation (NASDAQ: CDXC), a science-based, integrated nutraceutical company devoted to improving the way people age, announced today first quarter 2018 financial results.
 
First Quarter 2018 Highlights vs. First Quarter 2017
 
● 
Net sales up 95%, fueled by growth of TRU NIAGEN®;
 
● 
Gross profit as a percentage of net sales flat at approximately 48%, which includes certain charges; Excluding charges, gross profit was 52.5%;
 
● 
NIAGEN®-related sales at 65% of total sales, up from 29%;
 
● 
TRU NIAGEN sales at 71% of NIAGEN-related sales, up from 1%;
 
● 
Appointed Nobel Laureate, Sir John Walker, Emeritus Director and Professor at the MRC Mitochondrial Biology Unit at Cambridge to the Scientific Advisory Board; and
 
● 
18 human studies in various stages of completion.
 
“The growth of TRU NIAGEN continues to exceed our expectations,” said Rob Fried, President and Chief Operating Officer. “Sales are growing at very strong pace, and we are continuing to pursue strategic partnerships in several new markets.”
 
Frank Jaksch, Jr., CEO and co-founder of ChromaDex commented: “ChromaDex has been built on a foundation of solid science, and that foundation continues to strengthen. The total number of research collaborations signed with prestigious universities and research institutions for NIAGEN continues to grow. This, along with the work of our in-house team of scientists and PhDs, leaves us confident this research will expand the growing body of evidence demonstrating the importance of NIAGEN.”
 
Results of operations for the three months ended March 31, 2018
 
For the three months ended March 31, 2018 (“Q1 2018”), ChromaDex reported net sales of $6.6 million, up 95% compared to $3.4 million from continuing operations in the first quarter of 2017 ("Q1 2017"). The increase in first quarter revenues was driven by growth in sales of TRU NIAGEN.
 
Gross margin as a percentage of sales was roughly flat at 48% for both periods. Excluding a write-off related to the purchase of private label consumer products inventory from certain NIAGEN resellers which are no longer distributors of our product, adjusted gross profit, a non-GAAP measure, as a percentage of net sales, was 52.5% for Q1 2018 as compared to 48.0% for the same period in 2017. We experienced better margins due to the positive impact of TRU NIAGEN consumer product sales, which we anticipate will continue.
 
Operating expenses were $11.5 million in the first quarter of 2018, compared to $3.4 million from continuing operations in the same period for 2017. The increase of $8.1 million in operating expenses for first quarter was the result of the Company’s strategic decision to invest $2.6 million in advertising and marketing to build out the TRU NIAGEN brand, higher R&D expenses of $0.8 million as well as legal costs of $2.4 million, and higher stock-based compensation expense of $0.8 million. Excluding incremental legal expenses and equity-based compensation expenses, general and administrative expenses were $3.6 million, which were up by $1.3 million as compared to the prior year.
 
 
 
 
The net loss attributable to common stockholders for the first quarter of 2018 was $8.4 million or ($0.15) per share as compared to a net loss of $1.9 million or ($0.05) per share for Q1 2017. The higher losses in the first quarter were the result of the strategic decision to invest ahead of growth including higher stock-based compensation expense related to the hiring of senior executives, and higher legal fees, partially offset by higher sales volume and gross profits.
 
For the first quarter of 2018, the reported loss was negatively impacted by a non-cash charge of $1.3 million related to stock-based compensation.
 
Adjusted EBITDA, a non-GAAP measure, was ($7.0) million for Q1 2018, compared to adjusted EBITDA of ($1.4) million for Q1 2017. ChromaDex defines Adjusted EBITDA as net income (loss) adjusted for income tax, interest, depreciation, amortization and non-cash stock compensation costs. The Basic and Diluted Adjusted EBITDA per share for Q1 2018 was ($0.13) versus ($0.04) for Q1 2017.
 
In the first quarter of 2018, the net cash used in operating activities was $4.0 million versus $51,000 in the prior year. We ended the first quarter of 2018 with a cash of $41.0 million.
 
Outlook
 
For 2018, the Company expects to realize continued growth in TRU NIAGEN sales driven by our U.S. ecommerce and Watsons’ international business, as well as the launch of TRU NIAGEN in certain new international markets. The growth is expected to be concentrated in the second half of the year. The Company will continue to invest in marketing expenditures to build out the TRU NIAGEN brand, infrastructure, and new capabilities to support growth.
 
Investor Conference Call
 
ChromaDex management will host an investor conference call to discuss the year end results and provide a general business update on Thurs., May 10, at 4:30pm ET.
 
Participants should call in at least 10 minutes prior to the call. The dial-in information is as follows:
 
U.S. Toll-Free Number:                                  
(866) 327-8118
 
International Dial-In Number:                        
(678) 509-7526
 
Conference ID:                                       
5427849
 
Webcast link:                                            
https://edge.media-server.com/m6/p/9a46uwoq
 
The webcast replay will be available after the completion of the call on the Investor Relations section of the Company website, www.chromadex.com.
 
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
 
ChromaDex’s non-GAAP financial measures exclude certain inventory write-off for adjusted gross margin and exclude interest, tax, depreciation, amortization and share-based compensation for adjusted EBITDA. ChromaDex used these non-GAAP measures when evaluating its financial results as well as for internal resource management, planning and forecasting purposes. 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 an integrated, global nutraceutical company devoted to improving the way people age. ChromaDex scientists partner with leading universities and research institutions worldwide to uncover the full potential of NAD and identify and develop novel, science-based ingredients. 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 statements regarding the future growth rate of sales on truniagen.com and for Watsons’ international business, pursuing strategic partnerships, launching TRU NIAGEN in certain new international markets, and whether the Company will continue to invest in marketing expenditures. Other risks that contribute to the uncertain nature of the forward-looking statements are reported in our most recent Forms 10-Q and 10-K 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:
 
Andrew Johnson, Director of Investor Relations
949-419-0288
andrewj@chromadex.com
 
ChromaDex Media Contact:
 
Alex Worsham, Director of Strategic Partnerships
949-648-3775
alexw@chromadex.com
 
 
 
 
 
ChromaDex Corporation and Subsidiaries
 
 
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidated Statements of Operations
 
 
 
 
 
 
Three Month Periods Ended March 31, 2018 and April 1, 2017
 
 
 
 
 
 
(In thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Q1 2018 
  Q1 2017 
 
    
    
Sales, net
 $6,567 
 $3,368 
Cost of sales
  3,430 
  1,750 
 
    
    
Gross profit
  3,137 
  1,618 
 
    
    
Operating expenses:
    
    
Sales and marketing
  3,269 
  405 
Research and development
  1,439 
  664 
General and administrative
  6,828 
  2,322 
Operating expenses
  11,536 
  3,391 
 
    
    
Operating loss
  (8,399)
  (1,773)
 
    
    
Nonoperating expense:
    
    
Interest expense, net
  (44)
  (28)
Nonoperating expenses
  (44)
  (28)
 
    
    
Loss from continuing operations
  (8,443)
  (1,801)
 
    
    
Loss from discontinued operations
  - 
  (128)
 
    
    
Net loss
 $(8,443)
 $(1,929)
 
    
    
Basic and diluted loss per common share:
    
    
    Loss from continuing operations
 $(0.15)
 $(0.05)
    Loss from discontinued operations
 $- 
 $(0.00)
 
    
    
Basic and diluted loss per common share
 $(0.15)
 $(0.05)
 
    
    
Basic and diluted weighted average common shares outstanding
  54,858 
  38,031 
 
See Notes to Condensed Consolidated Financial Statements in Part I of ChromaDex's Quarterly Report
on Form 10-Q filed with Securities and Exchange Commission on May 10, 2018.
 
 
 
 
ChromaDex Corporation and Subsidiaries
 
 
 
 
 
 
 
 
 
 
 
 
 
Condensed Consolidated Balance Sheets
 
 
 
 
 
 
March 31, 2018 and December 30, 2017
 
 
 
 
 
 
(In thousands, except per share data)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
March 31, 2018
 
 
December 30, 2017
 
Assets
 
 
 
 
 
 
 
 
 
 
 
 
 
Current Assets
 
 
 
 
 
 
Cash
 $41,037 
 $45,389 
 
  Trade receivables, net of allowances of $0.6 million and $0.7 million, respectively;
 
    
   Receivables from Related Party: $0.8 million and $1.5 million, respectively
  4,770 
  5,338 
   Contract assets
  53 
  - 
   Receivable held at escrow
  750 
  - 
   Inventories
  5,063 
  5,796 
   Prepaid expenses and other assets
  909 
  655 
Total current assets
  52,582 
  57,178 
 
    
    
Leasehold Improvements and Equipment, net
  2,911 
  2,872 
Deposits
  359 
  272 
Receivable Held at Escrow
  - 
  750 
Intangible Assets, net
  1,593 
  1,652 
 
    
    
Total assets
 $57,445 
 $62,724 
 
    
    
Liabilities and Stockholders' Equity
    
    
 
    
    
Current Liabilities
    
    
   Accounts payable
 $5,856 
 $3,719 
   Accrued expenses
  3,709 
  3,645 
   Current maturities of capital lease obligations
  200 
  196 
   Contract liabilities and customer deposits
  202 
  314 
   Deferred rent, current
  117 
  114 
   Due to officer
  - 
  100 
Total current liabilities
  10,084 
  8,088 
 
    
    
Capital Lease Obligations, Less Current Maturities
  258 
  310 
Deferred Rent, Less Current
  439 
  492 
 
    
    
Total liabilities
  10,781 
  8,890 
 
    
    
Commitments and Contingencies
    
    
 
    
    
Stockholders' Equity
    
    
Common stock, $.001 par value; authorized 150,000 shares;
    
    
   issued and outstanding March 31, 2018 54,681 shares and
    
    
   December 30, 2017 54,697 shares
  55 
  55 
Additional paid-in capital
  111,489 
  110,380 
Accumulated deficit
  (64,880)
  (56,601)
Total stockholders' equity
  46,664 
  53,834 
 
    
    
Total liabilities and stockholders' equity
 $57,445 
 $62,724 
 
 
See Notes to Condensed Consolidated Financial Statements in Part I of ChromaDex's Quarterly Report
on Form 10-Q filed with Securities and Exchange Commission on May 10, 2018.
 
 
 
 
Gross Profit, Unaudited
 
 
 
 
 
 
Effect of Charges associated with the Inventory Write-off
Adjusted Gross Profit, Unaudited
 
 
 
(US GAAP)
 
 
 
 
 
 
 
 
 
 
 
 
 
Excluding Charges associated with Inventory Write-off
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Non-GAAP Presentation)
 
 
 
 
 
 
Three Months Ended March 31, 2018 and April 1, 2017
Three Months Ended March 31, 2018 and April 1, 2017
Three Months Ended March 31, 2018 and April 1, 2017
(In thousands)
 
 
 
 
 
 
(In thousands)
 
 
 
 
 
 
(In thousands)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Q1 2018 
  Q1 2017 
 
  Q1 2018 
  Q1 2017 
 
  Q1 2018 
  Q1 2017 
 
    
    
 
    
    
 
    
    
Sales, net
 $6,567 
 $3,368 
Sales, net
 $- 
 $- 
Sales, net
 $6,567 
 $3,368 
Cost of sales
  3,430 
  1,750 
Cost of sales
  (312)
  - 
Cost of sales
  3,118 
  1,750 
 
    
    
 
    
    
 
    
    
Gross profit
  3,137 
  1,618 
Effect of Inventory Write-off
  312 
  - 
Adjusted gross profit
  3,449 
  1,618 
Percentage of net sales
  47.8%
  48.0%
 
    
    
Percentage of net sales
  52.5%
  48.0%
 
    
    
 
    
    
 
    
    
 
 
 
 
 
Consolidated Statements of Operations, Unaudited
 
 
 
Effects of Charges associated with Interest, Tax, Depreciation,
Consolidated Statements of Operations, Adjusted EBITDA
 (US GAAP)
 
 
 
 
 
 
Amortization and Share-based Compensation Expense
 
 
 
Excluding Interest, Tax, Depreciation, Amortization and
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Share-based Compensation (Non-GAAP Presentation)
 
 
 
Three Months Ended March 31, 2018 and April 1, 2017
 
 
 
Three Months Ended March 31, 2018 and April 1, 2017
 
 
 
Three Months Ended March 31, 2018 and April 1, 2017
 
 
 
(In thousands, except per share data)    
 
 
 
(In thousands, except per share data)    
 
 
 
(In thousands, except per share data)    
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
  Q1 2018 
  Q1 2017 
 
  Q1 2018 
  Q1 2017 
 
  Q1 2018 
  Q1 2017 
 
    
    
 
    
    
 
    
    
Sales, net
 $6,567 
 $3,368 
Sales, net
 $- 
 $- 
Sales, net
 $6,567 
 $3,368 
Cost of sales
  3,430 
  1,750 
Cost of sales
  (74)
  (35)
Cost of sales
  3,356 
  1,715 
 
    
    
 
    
    
 
    
    
Gross profit
  3,137 
  1,618 
Gross profit
  74 
  35 
Gross profit
  3,211 
  1,653 
 
    
    
 
    
    
 
    
    
Operating expenses:
    
    
Operating expenses:
    
    
Operating expenses:
    
    
Sales and marketing
  3,269 
  405 
Sales and marketing
  (60)
  - 
Sales and marketing
  3,209 
  405 
Research and development
  1,439 
  664 
Research and development
  (128)
  - 
Research and development
  1,311 
  664 
General and administrative
  6,828 
  2,322 
General and administrative
  (1,175)
  (361)
General and administrative
  5,653 
  1,961 
Operating expenses
  11,536 
  3,391 
Operating expenses
  (1,363)
  (361)
Operating expenses
  10,173 
  3,030 
 
    
    
 
    
    
 
    
    
Operating loss
  (8,399)
  (1,773)
Operating income
  1,437 
  396 
Operating loss
  (6,962)
  (1,377)
 
    
    
 
    
    
 
    
    
Nonoperating expense:
    
    
Nonoperating income:
    
    
Nonoperating income (expense):
    
    
Interest expense, net
  (44)
  (28)
Interest expense, net
  44 
  28 
Interest expense, net
  - 
  - 
Nonoperating expenses
  (44)
  (28)
Nonoperating income
  44 
  28 
Nonoperating expenses
  - 
  - 
 
    
    
 
    
    
 
    
    
Loss from continuing operations
  (8,443)
  (1,801)
Income from continuing operations
  1,481 
  424 
Loss from continuing operations
  (6,962)
  (1,377)
 
    
    
 
    
    
 
    
    
Income from discontinued
operations
  - 
  (128)
Income from discontinued operations
  - 
  87 
Income from discontinued operations
  - 
  (41)
 
    
    
 
    
    
 
    
    
Net loss
 $(8,443)
 $(1,929)
Effects of adjusted EBITDA
 $1,481 
 $511 
Adjusted EBITDA
 $(6,962)
 $(1,418)
 
    
    
 
    
    
 
    
    
Basic and diluted loss per common share:       
    
Effects of adjusted EBITDA per common share:
    
Basic and diluted adjusted EBITDA per common share:
    
    Loss from continuing operations
 $(0.15)
 $(0.05)
    From continuing operations
 $0.03 
 $0.01 
    From continuing operations
 $(0.13)
 $(0.04)
    Earnings from discontinued operations
 $- 
 $(0.00)
    From discontinued operations
 $- 
 $0.00 
    From discontinued operations
 $- 
 $(0.00)
 
    
    
 
    
    
 
    
    
Basic and diluted loss per common share
 $(0.15)
 $(0.05)
Effects of adjusted EBITDA per common share
 $0.03 
 $0.01 
Basic and diluted adjusted EBITDA per common share
 $(0.13)
 $(0.04)
 
    
    
 
    
    
 
    
    
 
Weighted average common shares outstanding
 
    
 
Weighted average common shares outstanding
 
    
Weighted average common shares outstanding       
    
    Basic and diluted
  54,858 
  38,031 
    Basic and diluted
  54,858 
  38,031 
    Basic and diluted
  54,858 
  38,031